A DFT/TDDFT investigation was conducted on a series of cyclometalated iridium(III) complexes with 2,5-diaryl-1,3,4-oxadiazole (oxdn) derivatives to shed light on the effects of the stereoisomeric and steric factors on the photophysical properties. On the basis of the results reported herein, we attempt to explain the experimental observations according to which complexes N,N-trans [Ir(oxd0)2(acac)] (1a) and N,N-trans [Ir(oxd1)2(acac)] (2a) [with oxd0 = 2,5-diphenyl-1,3,4-oxadiazole, oxd1 = 2,5-bis(4-fluorophenyl)-1,3,4-oxadiazole and acac = acetylacetonate] show high quantum phosphorescence efficiencies (ΦPL) of 35 and 44%, while an extremely low ΦPL (<1%) was observed for a number of oxdn based complexes including N,N-cis [Ir(oxd3)2(acac)] (4b) [with oxd3 = 2-(4-fluorophenyl)-5-(2,4,6-triisopropylphenyl)-1,3,4-oxadiazole]. While new insights were gained on structural and electronic properties, the unusual photophysical properties recently reported for 4b were found to be not inherent to spin–orbit coupling (SOC) effects, but determined by both the S1–T1 splitting energy (ΔES1–T1) and the transition dipole moment (μS1) upon the S0 → S1 transition. Drastically large ΔES1–T1 and small μS1 for 4b (0.70 eV and 0.23 D, respectively) comparative to those for 2a (0.38 eV and 2.76 D, respectively) and 1a (0.58 eV and 2.44 D, respectively) were found to be tightly linked to the twisting degree of the oxdn ligand and to the trans–cis structural isomerism. On the basis of these parameters, the unusual physical properties of 4b were interpreted with respect to 1a and 2a, and the higher ΦPL of 2a with respect to that for 1a was explained.