Dimethylphenols are highly reactive in the atmosphere, and their oxidation plays a vital role in the autoignition and combustion processes. The dominant oxidation process for dimethylphenols is by gas-phase reaction with OH radical. In the present study, the reaction of OH radical with dimethylphenol isomers is studied using density functional theory methods, B3LYP, M06-2X, and MPW1K, and also at the MP2 level of theory using 6-31G(d,p) and 6-31+G(d,p) basis sets. The activation energy values have also been calculated using the CCSD(T) method with 6-31G(d,p) and 6-311+G(d,p) basis sets using the geometries optimized at the M06-2X/6-31G(d,p) level of theory. The reactions subsequent to the principal oxidation steps are studied, and the different reaction pathways are modeled. The positions of the OH and CH3 substituents in the aromatic ring have a great influence on the reactivity of dimethylphenol toward OH radical. Accordingly, the reaction is initiated in four different ways: H-atom abstraction from the phenol group, H-atom abstraction from a methyl group, H-atom abstraction from the aromatic ring by OH radical, or electrophilic addition of OH radical to the aromatic ring. Aromatic peroxy radicals arising from initial H-atom abstraction and subsequent O-2 addition lead to the formation of hydroperoxide adducts and alkoxy radicals. The O-2 additions to dimethylphenol-OH adduct results in the formation of epoxide and bicyclic radicals. The rate constants for the most favorable reaction pathways are calculated using canonical variational transition state theory with small curvature tunneling corrections. This study provides thermochemical and kinetic data for the oxidation of dimethylphenol in the atmosphere and demonstrates the mechanism for the conversion of peroxy radical into aldehydes, hydroperoxides, epoxides, and bicyclic radicals, and their lifetimes in the atmosphere.