Why can enzymes provide different products from only slightly different substrates? While the reaction of 2-hydroxyethylphosphonate (2-HEP) catalyzed by 2-hydroxyethylphosphonate dioxygenase (HEPD) yields hydroxymethylphosphonate and formic acid, the HEPD-catalyzed reaction of 1-HEP gives acetylphosphate. ONIOM(DFT:MM) was used to uncover the distinct reaction mechanisms for the different substrates. Calculations show that, in both reactions, similar radical intermediates are generated by the same process. After the formation of common radical intermediates, proton-coupled electron transfer (PCET) operates in the 1-HEP reaction, whereas in the 2-HEP reaction, it cannot occur and an alternative pathway sets in. Thus, the PCET plays a critical role in defining the fates of the substrates.