The {ital pp}{gamma} reaction at intermediate energies is investigated using a modern relativistic meson-exchange potential model. Both the single-scattering and rescattering terms are treated including relativistic corrections. It is shown that for energetic photons in the region near the end-point energy the relativistic spin correction is very large and reduces the {ital pp}{gamma} cross section by a factor of {similar to}2. This large correction is dynamical in origin and can be traced in a very simple way to the strong energy dependence of the {sup 1}{ital S}{sub 0} state contribution. It is also shown that, under these kinematical conditions, the rescattering term {ital reduces} the cross section, which amplifies the relativistic effects on the {ital pp}{gamma} reaction. For the kinematical conditions of the recent TRIUMF experiment at {ital T}{sub lab}=280 MeV the rescattering contribution {ital enhances} the cross section and reduces the discrepancy between the data and the calculation.