The thermal rearrangements of benzotriazole 1 to fulvenimine 4 and 1H-benzazirine 7 are investigated at DFT and CASPT2 levels of theory. Ring opening of benzotriazole 1 to 2-diazo-cyclohexadienimine 2 followed by N-2 elimination affords Z- and E-2-iminocyclohexadienylidenes 3, which have triplet ground states ((3)A ''). The open-shell singlet (OSS) ((1)A '') and closed-shell singlet (CSS) ((1)A') of 3 lie similar to 15 and 40 kcal/mol higher in free energy, respectively. The OSS 3 ((1)A '') is best described as a 1,3-diradical, whereas the CSS ((1)A') has the character of a carbene. A hetero-Wolff rearrangement of OSS 3 yields fulvenimine 4, which is a precursor of cyanocyclopentadiene 5, with a calculated activation barrier of 38 kcal/mol at the CASPT2(8,8) level, whereby there is a surface crossing from the OSS to the CSS near the transition state. The barrier for cyclization to 1H-benzo[b]azirine 7 is only similar to 13 kcal/mol. Therefore, reaction paths involving the singlet iminocyclohexadienylidene diradicals 3 will necessarily cause equilibration with 1H-benzazirine 7 prior to ring contraction to iminofulvene 4 and cyanocyclopentadiene 5, in agreement with experimental observations based on C-13 labeling. The thermolysis of 1-acetylbenzotriazole 7 leads to the analogous N-acetyl-diazocyclo-hexadienimines 8, N-acetyliminocyclohexadienylidene diradicals 9, and N-acetylfulvenimine 10. The E-N-acetyliminocyclohexadienylidene E9 ring closes to the N-acetyl-1H-benzazirine 11 prior to ring contraction to N-acetylfulvenimine 10, and the Z-N-acetyl-2-diazocyclohexadienimine Z8 ring closes to 2-methylbenzoxazole 12. 1H-benzazirines are predicted to be spectroscopically observable species.