Oxidative stress is considered to be a major contributor to dysfunction in a host of disease states. Reactive oxygen species (ROS) mediate distinct oxidative alterations in biopolymers, including DNA, proteins, lipids, and lipoproteins. Currently, the mechanisms of biochemical reactions underlying oxidative stress are poorly understood because of the instability of ROS. One of the consequences of oxidative stress is one-electron oxidation of tyrosine (Tyr) residues in proteins, which represents a hallmark of this insult and is implicated in the pathogenesis of a number of pathological processes leading to atherosclerosis, inflammatory conditions, multiple system atrophy and several neurodegenerative diseases. Major products of oxidation of Tyr include protein-bound dityrosine and isodityrosine. In this report, the mechanism of tyrosine coupling (including structure and stability of a number of proposed reaction intermediates) is studied by high-level density functional and conventional ab initio methods including B3LYP, MP2, CASSCF, and CASPT2. It is demonstrated that dityrosine and isodityrosine are the most stable structures at all theoretical levels applied. In addition to classical structures of the reaction intermediates, evidence is found for a novel transient structure of Tyr dimer, stacked dityrosyl. This dimer is predicted to exist because of strong electron correlation between two tyrosyl moieties. The counterpoise corrected energy of stacked dityrosyl is below the energy of two tyrosyl radicals by about 95 kJ/mol at the PUMP2/6-31** level. High proton affinity of tyrosyl radical (about 9.4 eV) suggests that positively charged amino acids in the vicinity of a solvent-exposed Tyr residue may increase the probability of tyrosine coupling.