Quantum chemical calculations have been employed for the inhibition efficiency of two substituted 1,3,4- oxadiazoles namely, 2,5-bis(2-pyridyl)-1,3,4- oxadiazole (POX) and 2,5-bis(2-hydroxyphenyl)-1,3,4-oxadiazole (HPOX) on mild steel have been investigated theoretically using density functional theory (DFT) at the B3LYP/6- 31G(d,P) basis set level in order to elucidate the different inhibition efficiencies and reactive sites of these compounds as corrosion inhibitors. The calculated quantum chemical parameters correlated to the inhibition efficiency are the frontier molecular orbital energies EHOMO (highest occupied molecular orbital energy), ELUMO (lowest unoccupied molecular orbital energy), energy gap (ΔE), dipole moment (μ) and the other parameters including global hardness (η), global softness (S), the absolute electronegativity (χ), the electrophilicity index (ω) and the fractions of electrons transferred (ΔN) from the inhibitor molecule to the metallic atom. The local reactivity has been analyzed through the condensed Fukui function and condensed softness indices using Mulliken population analysis. The calculated results are in agreement with the experimental data.