The full mechanism of the asymmetric α-thiolation of azlactones catalyzed by a cinchona alkaloid-derived squaramide was carefully investigated through theoretical calculations. The results revealed that the reaction proceeds in two sequential steps. First, the azlactone α-deprotonation by the catalyst tertiary amine group (which for the major product is the ratelimiting step) affords a chiral molecular aggregate containing the azlactone enolate. Next, three proposals were evaluated concerning the enantiodetermining step (carbon-sulfur bond formation). It was possible to exclude the azlactone enol as a key intermediate. The most viable pathway consists of a Münchnone-type activation mode, which associated with secondary hydrogen bonding interactions between the catalyst and the thiolating reagent (bifunctional catalysis), is responsible for the asymmetric induction process. Thus, by using two different reaction conditions, the theoretical enantiomeric excesses were computed and compared with literature data, presenting a good correlation with the reported experimental values.