Calculations using density functional theory (DFT, B3LYP/6-31G level) provide an explanation for the stereodivergent outcome observed in the Staudinger reaction between acyl chlorides and imines to form 2-azetidinones (beta-lactams). When the ketene is formed prior to the cycloaddition stages, preferential or exclusive formation of cis stereomers is predicted. When the imine reacts directly with the acyl chloride, the step that determines the stereochemical outcome of the reaction is an intramolecular S(N)2 displacement. Under these conditions, preferential or exclusive formation of trans stereomers is predicted, in good agreement with the experimental evidence available. It is found that both competitive processes are subjected to torquoelectronic effects. In addition, the reported calculations suggest that in both cases the polarity of the solvent enhances the diastereomeric excess of the reaction.