The possible reaction mechanism and origin of stereoselectivity of the NHC-catalyzed annulation reaction between isatin-derived enals and hydrazones were theoretically studied by using density functional theory (DFT). According to the computational results, the Michael addition process was identified to be the stereoselectivity determining step and led to the experimentally observed S-configured product predominantly. The distortion-interaction analysis showed that the electrostatic interaction between two interactive fragments controls the stereoselectivity. Moreover, the types of interactions were further verified by non-covalent interaction analysis, in which the ππ, C-HF and LPπ interactions involved in the favorable transition state are the key for determining the stereoselectivity.