High-level ab initio molecular orbital calculations are used to study the magnitude and origin of the penultimate unit effect in atom transfer radical polymerization (ATRP) of dimers involving the comonomers methyl acrylate (MA), methyl methacrylate (MMA), and propylene (P). The penultimate unit effects depend on the nature of the terminal unit and the halogen and can be significant, with the MMA unit in particular altering the equilibrium constant for the bond dissociation equilibrium by as much as 2 orders of magnitude. Specifically, the ratios of the equilibrium constants (K) for the bond dissociation reactions of H-M-2-M-1-Cl at 298 K, relative to the equilibrium constant (K-0) of the corresponding unimer H-M-1-Cl, for penultimate units M-2 = P, MA, and MMA are respectively 0.81, 1.27, and 92.46 for M-1 = P; 8.73, 2.64, and 32.69 for M-1 = MA; and 5.73, 0.78, and 1.57 for M-1 = MMA. For the bromides, H-M-2-M-1-Br, the corresponding ratios K/K-0 for M-2 = P, MA, and MMA are respectively 0.55, 0.70, and 54.79 (M-1 = P); 5.44, 0.63, and 2.38 (M-1 = MA); and 0.24, 12.18, and 43.77 (M-1 = MMA). It is shown that the penultimate unit effects arise in both the entropy and enthalpy of the equilibrium and are the result of a complex interplay of stereoelectronic effects which, for the ester linkages, are heavily influenced by intramolecular hydrogen bonding. The penultimate unit effects have important implications for initiator design; for example, they can account for the experimental observation that the isobutyrate halide is an inefficient initiator for MMA polymerization. The results also imply that penultimate unit effects need to be taken into account in the synthesis of block, gradient, and random copolymers.