The reaction of cyclobutylidene to methylenecyclopropane represents a ring contraction rearrangement in which a three-membered ring is generated from a four-membered ring. The quantum-mechanical investigation of its singlet state (1 <r2) by the M1NDO/3 method reveals that the reaction is initiated by an electrophilic attack of the empty p AO at the carbene site Ci to the CH2 group C3. Thus it takes up a bicyclobutane-like structure. In this species, which corresponds to a nonclassical carbene, electron density is shifted toward the carbene site. In a second step it can easily undergo rearrangement to methylenecyclopropane. In this process the bond fission is controlled by orbital symmetry. For the total reaction an activation enthalpy of 8 kcal/mol is computed, When correction terms for the ring strain are added, this represents an upper limit for the reaction. © 1979, American Chemical Society. All rights reserved.