This study analyzes the samarium diiodide-promoted cyclizations of 5-arylpentan-2-ones to dearomatized bicyclic products utilizing density functional theory. The reaction involves a single electron transfer to the carbonyl group, which occurs synchronously with the rate determining cyclization event, and a second subsequent proton-coupled electron transfer. These redox reactions are accurately computed employing small core pseudo potentials explicitly involving all f-electrons of samarium. Comparison of the energies of the possible final products rules out thermodynamic control of the observed regio- and diastereoselectivities. Kinetic control via appropriate transition states is correctly predicted, but to obtain reasonable energy levels the influence of the co-solvent hexamethylphosphortriamide has to be estimated by using a correction term. The steric effect of the bulky samarium ligands is decisive for the observed stereoselectivity. Carbonyl groups in para-position of the aryl group change the regioselectivity of the cyclization and lead to spiro compounds. The computations suggest again kinetic control of this deviating outcome. However, the standard mechanism has to be modified and the involvement of a complex activated by two SmI2 moieties is proposed in which two electrons are transferred simultaneously to form the new C–C bond. Computation of model intermediates show the feasibility of this alternative mechanism.