Our density functional theory study of hydroperoxy (OOH) intermediates on various model titanosilicalite (TS-1) Ti centers explores how microstructural aspects of Ti sites effect propylene epoxidation reactivity and shows that Ti sites located adjacent to Si vacancies in the TS-1 lattice are more reactive than fully coordinated Ti sites, which we find do not react at all. We show that propylene epoxidation near a Si-vacancy occurs through a sequential pathway where H2O2 first forms a hydroperoxy intermediate Ti-OOH (15.4 kcal/mol activation energy) and then reacts with propylene by proximal oxygen abstraction (9.3 kcal/mol activation energy). The abstraction step is greatly facilitated through a simultaneous hydride transfer involving neighboring terminal silanol groups arising from the Si vacancy. The transition state for this step exhibits 6-fold oxygen coordination on Ti, and we conclude that the less constrained environment of Ti adjacent to a vacancy accounts for greater transition state stability by allowing relaxation to a more octahedral geometry. These results also show that the reactive hydroperoxy intermediates are generally characterized by smaller electron populations on the proximal oxygen atom compared to nonreactive intermediates and greater O-O polarization-providing a potential means of computationally screening novel titanosilicate structures for epoxidation reactivity.