A series of tetrapeptides and pentapeptides was synthesized bearing a phthalimide chromophore at the N-terminus. The C-terminus of the peptides was strategically substituted with an amino acid, Phe, Phe(OMe), or Phe(OMe)2 characterized by different oxidation potentials. The photochemical reactivity of the peptides was investigated by preparative irradiation and isolation of photoproducts, as well as with laser flash photolysis. Upon photoexcitation, the peptides undergo photoinduced electron transfer (PET) and decarboxylation, followed by diastereoselective cyclization with the retention of configuration for tetrapeptides or inversion of configuration for pentapeptides. Molecular dynamics (MD) simulations and NOE experiments enabled assignment of the stereochemistry of the cyclic peptides. MD simulations of the linear peptides disclosed conformational reasons for the observed diastereoselectivity, being due to the peptide backbone spatial orientation imposed by the Phe amino acids. The photochemical efficiency for the decarboxylation and cyclization is not dependent on the peptide length, but it depends on the oxidation potential of the amino acid at the C-terminus. The results described herein are particularly important for the rational design of efficient photochemical reactions for the preparation of cyclic peptides with the desired selectivity.