Oxazepam is an active metabolite of diazepam, the most prescribed anxiolytic drug. Under physiological conditions oxazepam displays extreme chiral instability so examination of reaction mechanism underlying the enantiomerization of oxazepam is very important. Four different mechanisms, possibly involved in this epimerization, were proposed in the literature. In this work, quantum-chemical models were used to search for all feasible reaction pathways. The most simple enantiomerization process corresponds to a deprotonation pathway in which the proton at the chiral C3-atom is eliminated and the carbanion intermediate is formed. The computational results exclude the C3-H/H exchange as a possible mechanism because the C3-carbanion is calculated as the least stable species. Keto-enol tautomerization is also suggested as possible mechanism. But, thermodynamic and kinetic calculations confirm that enolization is not reaction mechanism underlying the enantiomerization of oxazepam. The third mechanism includes the protonation of the C3-OH group followed by the elimination of water. The resulting carbocation intermediate undergoes reversible hydration. The protonation of C3-OH group resulted in the least stable protonated species so this mechanism is not operative in stereochemical instability of oxazepam. The fourth mechanism which include the intramolecular proton transfer from the C3-OH to the imine N4 atom, fits within the targeted barrier limit (ΔG‡ < 91 kJ/mol) set by experiments. According to computational results, the enantiomerization of oxazepam follows the mechanism of the ring-chain tautomerism. No other mechanism, suggested earlier in the literature, matches the experimental data in terms of Gibbs free energy.