A systematic study of the fragmentation pattern of N-diisopropyloxyphosphoryl (DIPP) dipeptide methyl esters in an electrospray ionization (ESI) tandem mass spectrometry (MS/MS) was presented. A combination of accurate mass measurement and tandem mass spectrometry had been used to characterize the major fragment ions observed in the ESI mass spectrum. It was found that the alkali metal ions acted as a fixed charge site and expelled the DIPP group after transferring a proton to the amide nitrogen. For all the N-phosphoryl dipeptide methyl esters, under the activation of a metal ion, the rearrangement product ion at m/z 163 was observed and confirmed to be the sodium adduct of phosphoric acid mono-isopropyl esters (PAIE), via a specific five-membered penta-co-ordinated phosphorus intermediate. However, no rearrangement ion was observed when a beta-amino acid was at the N-terminal. This could be used to develop a novel method for differentiating isomeric compounds when either alpha- or beta-amino acid are at the N-terminus of peptides. From the [M+Na]+ ESI-MS/MS spectra of N-phosphoryl dipeptide methyl esters (DIPP Xaa1 Xaa2 OMe), the peaks corresponding to the [M+Na Xaa1 C3H6]+ were observed and explained. The [M+Na]+ ESI-MS/MS spectra of N-phosphoryl dipeptide methyl esters with Phe located in the C-terminal, such as DIPPValPheOMe, DIPPLeuPheOMe, DIPPIlePheOMe, DIPPAlaPheOMe and DIPPPhePheOMe, had characteristic fragmentation. Two unusual gas-phase intramolecular rearrangement mechanisms were first proposed for this fragmentation. These rearrangements were not observed in dipeptide methyl ester analogs which did not contain the DIPP at the N-terminal, suggesting that this moiety was critical for the rearrangement.