Copper-catalyzed skeletal rearrangement of O-propargyl arylaldoximes 1 produced the corresponding 4-arylidene-2-azetidinones 2 and their regioisomers 2' in good to excellent yields. For example, the reaction of benzaldehyde O-1,3-diphenylprop-2-ynyl oxime (1b) in the presence of 10 mol% CuBr in toluene at 100 degrees C for 24 h gave (E)-4-benzylidene-1,3-diphenylazelidin-2-one (2b) in 96% yield. C-13 labeling experiments suggest that the present reaction proceeds through bond cleavage of five different covalent bonds: C=N, N O, C O, C C, and C C.