The reaction proceeds via a cascade of four subsequent pericyclic reactions (Scheme 3). Heating a cyclobutenone above 80 °C initiates a four-electron electrocyclic cleavage generating a vinyl ketene which reacts with an acetylene in a regiospecific [2+2] cycloaddition (Scheme 4). Reversible electrocyclic cleavage of the 2-vinylcyclobutenone yields a dienylketene. The dienylketene then undergoes a six-electron electrocyclization to give a hexadienone intermediate which rapidly tautomerizes to yield a highly substituted phenol or naphthol structures.
In the case of the modified benzannulation reaction (Scheme 5); irradiation of the diazoketones induces the Wolff rearrangement yielding the vinyl ketene intermediate which reacts with the acetylene in a [2+2] cycloaddition then a four-electron cleavage of the resulting 4-substituted cyclobutenone produces a dienylketene which then undergoes a six-electron electrocyclization to give the 2,4-cyclohexanedione which tautomerizes to the final aromatic product.