Cycloclavine is a complex ergot alkaloid containing an unusual cyclopropyl moiety, which has a wide range of biological activities and pharmaceutical applications. The biosynthesis of cycloclavine requires a series of enzymes, one of which is a nonheme FeII/α-ketoglutarate-dependent (aKG) oxidase (Aj_EasH). According to the previous proposal, the cyclopropyl ring formation catalyzed by Aj_EasH follows an unprecedented oxidative mechanism; however, the reaction details are unknown. In this article, on the basis of the recently obtained crystal structure of Aj_EasH (EasH from Aspergillus japonicas), the reactant models were built, and the reaction details were investigated by performing QM-only and combined QM and MM calculations. Our calculation results reveal that the biosynthesis of cyclopropyl moiety involves a radical intermediate rather than a carbocationic or carbanionic intermediate as in the biosynthesis of terpenoid family. The iron(IV)-oxo first abstracts a hydrogen atom from the substrate to trigger the reaction, and then the generated radical intermediate undergoes ring rearrangement to form the fused 5-3 ring system of cycloclavine. On the basis of our calculations, the absolute configuration of the cycloclavine catalyzed by Aj_EasH from Aspergillus japonicus should be (5R,8R,10R), which is different from the product isolated from Ipomoea hildebrandtii (5R,8S,10S). Residues at the active site play an important role in substrate binding, ring rearrangement, and enantioselectivity.