The elimination of carbon monoxide and water from a series of protonated dipeptides, [XxxYyy + H]+, is investigated by tandem mass spectrometry experiments and density functional theory. The combined results show that CO loss occurs on the a1-y1 pathway, which begins by rearrangement of the added proton to the amide N-atom and creates the proton-bound dimer of an amino acid (Yyy) and an imine (that from Xxx residue). The loss of H2O is initiated from a tautomer in which the added proton has migrated to the hydroxyl group of the C-terminus, thereby promoting the formation of an ion with protonated oxazolone structure (a nominal b 2 ion). The highest yields of [XxxYyy + H - CO]+ and [XxxYyy + H - H2O]+ are observed at threshold energies. As the internal energy of the protonated dipeptides increases, these primary products are depleted by consecutive dissociations yielding mostly backbone fragments. Specifically, [XxxYyy + H - CO]+ decomposes to y 1 (protonated Yyy) and a1 (immonium ion of Xxx residue), while [XxxYyy + H - H2O]+ produces a2 and the immonium ions of residues Xxx (a1) and Yyy (internal immonium ion). Water loss takes place more efficiently when the more basic residue is at the C-terminal position. Increasing the basicity of the N-terminal residue enhances the extent of CO versus H2O loss and introduces the competitive elimination of NH3. The dissociations leading to eliminations of small neutrals (CO, H2O, etc.) generally proceed over transition states that lie higher in energy than the corresponding dissociation products. The excess energy is disposed of either in translational or rovibrational modes of the products, depending on the stability of the incipient noncovalent assemblies emerging during the cleavage of the small neutrals. © 2004 American Society for Mass Spectrometry.