We report an investigation of the mechanistic features of OH-initiated oxidation reactions of p-xylene using density function theory (DFT). Reaction energies for the formation of the aromatic intermediate radicals have been obtained to determine their relative stability and reversibility, and their activation barriers have been analyzed to assess the energetically favorable pathways to propagate the p-xylene oxidation. OH addition is predicted to occur dominantly at the ortho position, with branching ratios of 0.8 and 0.2 for ortho and ipso additions, respectively, and the calculated overall rate constant is in agreement with available experimental studies. Under atmospheric conditions, the p-xylene peroxy radicals arising from initial OH and subsequent O-2 additions to the ring are shown to cyclize to form bicyclic radicals, rather than to react with NO to lead to ozone formation. With relatively low barriers, isomerization of the p-xylene bicyclic radicals to more stable epoxide radicals likely occurs, competing with O-2 addition to form bicyclic peroxy radicals. The study provides thermochemical and kinetic data for assessment of the photochemical production potential of ozone and formation of toxic products and secondary organic aerosol from p-xylene oxidation.