The effects of aqueous solvent on structures and mechanism of the [2 + 2] cycloaddition between ketene and imine were investigated by using correlated MP2 and MP4 levels of ab initio molecular orbital theory in conjunction with the dielectric continuum Generalized Conductor-like Screening Model (GCOSMO) for solvation. We found that reactions in the gas phase and in aqueous solution have very different topology on the free energy surfaces but have similar characteristic motion along the reaction coordinate. First, it involves formation of a planar trans-conformation zwitterionic complex, then a rotation of the two moieties to form the cycloaddition product. Aqueous solvent significantly stabilizes the zwitterionic complex, consequently changing the topology of the free energy surface from a gas-phase single barrier (one-step) process to a double barrier (two-step) one with a stable intermediate. Electrostatic solvent-solute interaction was found to be the dominant factor in lowering the activation energy by 4.5 kcal/mol. The present calculated results are consistent with previous experimental data.