Transition state dynamics of dissociation and association reactions N2O4--> <--2NO(2) in liquid state are studied by classical molecular dynamics simulations of reactive liquid NO2 at 298 K. An OSPP+LJ potential between NO2 molecules proposed in paper I [J. Chem. Phys. 115, 10852 (2001)], which takes into account the orientational sensitivity of the chemical bond, has been used in the simulation. The trajectory and energy evolution of various reactions are studied in the OSPP+LJ liquid, which reproduces both the observed liquid phase equilibrium constant and Raman band shape of the dissociation mode. It is found that a NO2 pair in reactive liquid NO2 is bound when E-T<0 and dissociates when E-T>0, and the dissociation of a reactant pair occurs when the transition state (TS) surface of E-T=0 is crossed from negative to positive, where E-T is the sum of the potential and kinetic energies of intermolecular motion of the pair. Two types of dissociation are found depending on the source of energy for dissociation; the first type D is the dissociation via collisional activation of the reactive mode by solvent molecules, and the second type T is the dissociation via bond transfer from a dimer to a monomer NO2 through the TS of NO2 trimer. It is concluded that the type T dissociation is found to be much more probable than the type D dissociation because of easy energy conservation. The reactant experiences the TS of NO2 trimer for a long time (1-10 ps) in NO2 mediated bond transfer reactions, and crossing and recrossing trajectories and dynamics in the TS neighborhood are studied. (C) 2004 American Institute of Physics.