Treatment of optically active 6-nitrohex-1-en-3-ols with Ag2O and iodine under basic conditions resulted in an oxidative intramolecular cyclization reaction to give isoxazoline-N-oxide along with bicyclo[3.1.0]hexane. The stereoselectivity and chemoselectivity of the reaction depended on the configuration of the stereogenic center adjacent to the alkenyl group. The structure was determined by X-ray crystallographic analyses as well as coupling constants from NMR data. Stereochemical preferences in the transition structure of the reaction are discussed.