On the basis of ab initio calculations we propose a revised mechanism for the reaction of organic sulfides with singlet oxygen, which is more consistent with experimental evidence than previous schemes. In aprotic solvents the reagents initially form a weakly bound peroxysulfoxide, with a small barrier due to entropy. The peroxysulfoxide may decay back to ground State (triplet) oxygen, be trapped by sulfoxides, or rearrange to a S-hydroperoxysulfonium ylide with a barrier of similar to 6 kcal/mol. The latter is similar to 6 kcal/mol more stable than the peroxysulfoxide, and can be trapped by sulfides or rearrange to a sulfone. In some cases, like five-membered rings or benzylic sulfides, the S-hydroperoxysulfonium ylide may undergo a 1,2-OOH shift to an alpha-hydroperoxysulfide, which eventually leads to cleavage products. In protic solvents the peroxysulfoxide is rapidly converted to a sulfurane by solvent.