The nonheme iron dioxygenase capreomycin C (CmnC) hydroxylates a free L-arginine amino acid regio- and stereospecifically at the C3-position as part of the capreomycin antibiotics biosynthesis. Little is known on its structure, catalytic cycle and substrate specificity and, therefore, a comprehensive computational study was performed. A large QM cluster model of CmnC was created of 297 atoms and the mechanisms for C3-H, C4-H and C5-H hydroxylation and C3-C4 desaturation were investigated. All low-energy pathways correspond to radical reaction mechanisms with an initial hydrogen atom abstraction followed by OH rebound to form alcohol product complexes. The work is compared to alternative L-Arg hydroxylating nonheme iron dioxygenases and the differences in active site polarity are compared. We show that a tight hydrogen bonding network in the substrate binding pocket positions the substrate in an ideal orientation for C3-H activation, whereby the polar groups in the substrate binding pocket induce an electric field effect that guides the selectivity.