The effect of steric and electronic environments around the sulfur and nitrogen atoms and the role of nonbonded S center dot center dot center dot O/N interactions on the cyclization reactions of amide substituted benzene sulfenic acids are described. The reaction profiles and the role of different substituents on the cyclization are investigated in detail by theoretical calculations. It is shown that the synthetic thiols having ortho-amide substituents may serve as good models for the enforced proximity of the amide and cysteine thiol groups at the active site of protein tyrosine phosphatase 1B (PTP1B). However, some of the sulfenic acids derived from such models do not effectively mimic the cyclization of protein sulfenic acids. This is mainly due to the requirement of very high energy for breaking the S-O bond to form a planar five-membered ring of isothiazolidinone. It is shown that the sulfenic acid having two substituentsan amide moiety and a heterocyclic groupin the ortho-positions undergoes a rapid cyclization reaction to produce the corresponding sulfenyl amide species. These studies reveal that the introduction of a substituent at the 6-position of the benzene ring enhances the cyclization process not only by facilitating a closer approach of the -OH group and the backbone -NH moiety but also by increasing the electrophilicity of the sulfur atom in the sulfenic acid.