Indole monooxygenases (IMOs) are enzymes from the family of Group E monooxygenases, requiring flavin adenine dinucleotide (FAD) for their activities. IMOs play important roles in both sulfoxidation and epoxidation reactions. The broad substrate range and high selectivity of IMOs make them promising biocatalytic tools for synthesizing chiral compounds. In the present study, quantum chemical calculations using the cluster approach were performed to investigate the reaction mechanism and the enantioselectivity of the IMO from Variovorax paradoxus EPS (VpIndA1). The sulfoxidation of methyl phenyl sulfide (MPS) and the epoxidation of indene were chosen as the representative reactions. The calculations confirmed that the FADOOH intermediate is the catalytic species in the VpIndA1 reactions. The oxidation of MPS adopts a one-step mechanism involving the direct oxygen-transfer from FADOOH to the substrate and the proton transfer from the -OH group back to FAD, while the oxidation of indene follows a stepwise mechanism involving a carbocation intermediate. It was computationally predicted that VpIndA1 prefers the formation of (S)-product for the MPS sulfoxidation and (1S,2R)-product for the indene epoxidation, consistent with the experimental observations. Importantly, the factors controlling the stereo-preference of the two reactions are identified. The findings in the present study provide valuable insights into the VpIndA1-catalyzed reactions, which are essential for the rational design of this enzyme and other IMOs for industrial applications. It is also worth emphasizing that the quantum chemical cluster approach is again demonstrated to be powerful in studying the enantioselectivity of enzymatic reactions.