The oxidation mechanism of dimethyl ether is investigated using ab initio methods. The structure and energetics of reactants, products, and transition structures are determined for all pathways involved in the oxidation mechanism. The detailed pathways leading to the experimentally observed products of dimethyl ether oxidation are presented. The energetics of over 50 species and transition structures involved in the oxidation process are calculated with G2 and G2(MP2) energies. The principal pathway following the initial attack of dimethyl ether (CH3OCH3) by the OH radical is the formation of the methoxymethyl radical (CH2OCH3). Oxidation steps lead to the formation of methyl formate, which is consistent with the experimentally observed products. Oxidation pathways of methyl formate are also considered.