The B3LYP/6-31G(d, p) method of density functional theory was used to study the influence of carboxylic acid and water molecules on parallel ethylene oxidation reactions (epoxidation and hydroxylation) by peroxyacetic acid with the formation of various products. It was shown that carboxylic acid in the nondissociated form always present in the reaction mixture for several reasons had a catalytic action on this reaction and therefore contributed to an increase in its selectivity. We also found that the water molecule and its dimer facilitated epoxide formation. The suggestion was made that, if the reaction was performed in an aqueous medium, where the acid dissociated, the situation could radically change, and the hydroxylation reaction with the formation of glycol and/or its ester of the corresponding carboxylic acid would become predominant. © 2010 Pleiades Publishing, Ltd.