Density-functional theory studies on the [2 + 2] reaction between N-silylimines and ketenes to form the corresponding 2-azetidinones (beta-lactams) help to clarify several aspects on the mechanism of the Staudinger reaction. This reaction has been studied experimentally by Panunzio et al. It is shown that the formation of the 2-azetidinone ring takes place via two consecutive reactions. The first reaction consists of the nucleophilic addition of the iminic nitrogen to the sp-hybridized carbon atom of the ketene, with simultaneous migration of the silyl group from the imine to the oxygen atom of the ketene. This leads to silyl enol intermediates, in good agreement with the experimental results. Formation of the N-silylated beta-lactam takes place via a domino reaction consisting of a conrotatory thermal electrocyclization followed by a new silatropic rearrangement. It is also found that isomerization of the starting N-silylimine has a lower activation barrier than that associated with the formation of the C-N bond, which explains the stereochemical outcome experimentally observed. Further considerations on the asymmetric torquoelectronic effects involved in this reaction are also reported.