We report the first detailed analysis at correlated levels of ab initio theory of experimentally studied peptide cations undergoing charge reduction by collisional electron transfer and competitive dissociations by loss of H atoms, ammonia, and N-C-alpha bond cleavage in the gas phase. Doubly protonated Gly-Lys, (GK + 2H)(2+), and Lys-Lys, (KK + 2H)(2+), are each calculated to exist as two major conformers in the gas phase. Electron transfer to conformers with an extended lysine chain triggers highly exothermic dissociation by loss of ammonia from the Gly residue, which occurs from the ground (X) electronic state of the cation radical. Loss of Lys ammonium H atoms is predicted to occur from the first excited (A) state of the charge-reduced ions. The X and A states are nearly degenerate and show extensive delocalization of unpaired electron density over spatially remote groups. This delocalization indicates that the captured electron cannot be assigned to reduce a particular charged group in the peptide cation and that superposition of remote local Rydberg-like orbitals plays a critical role in affecting the cation-radical reactivity. Electron attachment to ion conformers with carboxyl-solvated Lys ammonium groups results in spontaneous isomerization by proton-coupled electron transfer to the carboxyl group forming dihydroxymethyl radical intermediates. This directs the peptide dissociation toward N-C-alpha bond cleavage that can proceed by multiple mechanisms involving reversible proton migrations in the reactants or ion-molecule complexes. The experimentally observed formations of Lys z(+center dot) fragments from (GK + 2H)(2+) and Lys c(+) fragments from (KK + 2H)(2+) correlate with the product thermochemistry but are independent of charge distribution in the transition states for N-C-alpha bond cleavage. This emphasizes the role of ion-molecule complexes in affecting the charge distribution between backbone fragments produced upon electron transfer or capture.