The direct oxidation of ebselen and several derivatives by hydrogen peroxide is investigated using the B3LYP/ 6-31 G(d,p) method to elucidate the effects of substituents on GPx-like activity. While previous studies have attributed the differences in GPx activity of substituted ebselen compounds to the electronic nature of the substituents, the influence of functional groups is poorly understood. The effects of various solvents are incorporated by employing the CPCM method. It is shown that a substituent in the ortho position to the selenium atom sterically hinders attack of a nucleophile at selenium and thus increases the barrier to reaction. The observed increase in GPx-like activity of an ebselen derivative with an ortho substituent is explained by the fact that the steric hindrance prevents thiol exchange reactions.