Neutral loss of water and ammonia are often significant fragmentation channels upon collisional activation of protonated peptides. Here, we deploy infrared ion spectroscopy to investigate the dehydration reactions of protonated AlaSer, AlaThr, GlySer, GlyThr, PheSer, PheThr, ProSer, ProThr, AsnSer, and AsnThr, focusing on the question of the structure of the resulting [M + H - H2O]+ fragment ion and the site from which H2O is expelled. In all cases, the second residue of the selected peptides contains a hydroxyl moiety, so that H2O loss can potentially occur from this side-chain, as an alternative to loss from the C-terminal free acid of the dipeptide. Infrared action spectra of the product ions along with quantum-chemical calculations unambiguously show that dehydration consistently produces fragment ions containing an oxazoline moiety. This contrasts with the common oxazolone structure that would result from dehydration at the C-terminus analogous to the common b/y dissociation forming regular b2-type sequence ions. The oxazoline product structure suggests a reaction mechanism involving water loss from the Ser/Thr side-chain with concomitant nucleophilic attack of the amide carbonyl oxygen at its β-carbon, forming an oxazoline ring. However, an extensive quantum-chemical investigation comparing the potential energy surfaces for three entirely different dehydration reaction pathways indicates that it is actually the backbone amide oxygen atom that leaves as the water molecule.