2-Methoxyfuran reacts with β-nitrostyrenes to give Michael adducts. Interestingly, isoxazoline N-oxides were obtained in the reactions with β-nitrostyrenes possessing additional electron-withdrawing groups [COPh (2f) and CO2Et (2g)]. (Z)-Nitrostyrene (2g) gives trans-isoxazoline (4g) and (E)-nitrostyrene (2f) leads to the cis-form product 4f. We have used theoretical methods to investigate the mechanism and to probe the regio- and stereo-selectivity observed in the rearrangement and the Michael reactions. To account for the selectivity observed in these reactions, we examined the Fukui functions and located the transition states (TS) using density functional theory (DFT) calculations at the B3LYP/6–31G* level. The first step involves a nucleophilic attack by the α-carbon atom (C4) of the furan ring on the vinyl C-atom (C5) of the nitrostyrene part to give a zwitterionic intermediate (IN1). Fission of the C–O bond of the furan ring in the intermediate and ring closure via the oxygen atom (endo-O atom) of the nitro group gives the isoxazoline N-oxide. Alternatively, the intermediate (IN1) may be transformed into the Michael adduct by an intramolecular proton transfer mediated by the formation of a four-membered transition-state structure. The potential-energy barriers for these reactions had the following values: 5.1 kcal/mol for 2f and 17.0 kcal/mol for 2g′ (CO2Me) at the rearrangement step, and 41–49 kcal/mol for the proton-transfer step. The solvent effect in CHCl3 stabilized the electrophilic attack by 1–14 kcal/mol. DFT analysis of these reactions is in good agreement with the experimental results.