Thermolysis of dimethyl 2-[(3-oxo-3H-isoindol-1-yl)oxy]malonate (8) promotes a [1,4]-H shift in the imidic N¼C O CH fragment of the starting molecule, which leads to a reactive carbonyl ylide. This carbonyl ylide can be trapped by the C¼N bond of imidates and imines, as well as the C¼O bond of benzaldehyde. The corresponding cycloadducts 11, 14, and 16 are formed regioselectively in good yields (60 – 95%) and with high stereoselectivity. In the case of 11, the minor cycloadduct in solution undergoes an isomerization to give the more stable stereoisomer. The structures of two cycloadducts, i.e., 11a and 14a, have been established by X-ray crystallography.