As with other cycloaddition reactions of a 1,3-dipole with a π-system, 1,3-dipolar cycloaddition using an azomethine ylide is a six-electron process. According to the Woodward–Hoffmann rules, this addition is suprafacial with respect to both the dipole and dipolarophile. The reaction is generally viewed as concerted, in which the two carbon-carbon bonds are being formed at the same time, but asynchronously. However, depending on the nature of the dipole and dipolarophile, diradical or zwitterionic intermediates are possible.  The endo product is generally favored, as in the isoelectronic Diels–Alder reaction. In these reactions, the azomethine ylide is typically the HOMO, and the electron-deficient dipolarophile the LUMO, although cycloaddition reactions with unactivated π-systems are known to occur, especially when the cyclization is intramolecular.  For a discussion of frontier molecular orbital theory of 1,3-dipolar cycloadditions, see 1,3-dipolar cycloaddition#Frontier molecular orbital theory.
1,3-Dipolar cycloaddition reactions of azomethine ylides commonly use alkenes or alkynes as dipolarophiles, to form pyrrolidines or pyrrolines, respectively. A reaction of an azomethine ylide with an alkene is shown above, and results in a pyrrolidine. This kind of reactions can be used to synthesis Ullazine. While dipolarophiles are typically α,β-unsaturated carbonyl compounds, there have been many recent advances in developing new types of dipolarophiles.
When the dipole and dipolarophile are part of the same molecule, an intramolecular cyclization reaction can lead to a polycyclic product of considerable complexity. If the dipolarophile is tethered to a carbon of the dipole, a fused bicycle is formed. If it is tethered to the nitrogen, a bridged structure results. The intramolecular nature of the reaction can also be useful in that regioselectivity is often constrained. Another advantage to intramolecular reactions is that the dipolarophile need not be electron-deficient—many examples of cyclization reactions with electron-rich, alkyl-substituted dipolarophiles have been reported, including the synthesis of martinellic acid shown below.