Transition structures for the addition of water and formaldehyde to (Z)-formylketene ((Z)-3a) were studied using ab initio calculations. Geometries were optimized at the MP2/6-31G* level of theory, and energies were calculated at the MP4(SDQ)/6-31G* level. The barrier for the addition of water to (Z)-3a is predicted to be lower (6.3 kcal/mol) than that for the addition of formaldehyde (10.6 kcal/mol), a difference which should provide synthetically useful selectivity. For the ring opening of the beta-lactone 15a to (Z)-3a, the barrier is lower, only 2.5 kcal/mol. Geometries of the transition structures are early, as expected for exothermic reactions. All of the transition structures are planar, or nearly so, and indicate concerted, slightly asynchronous reactions. The orbital symmetry rules are irrelevant to these planar structures. Analysis of the molecular orbitals indicates that the reactions are orbital symmetry allowed and are best described as pseudopericyclic. This concept is discussed in detail and provides an explanation of the remarkably low barriers for these reactions as compared to model pericyclic reactions.