A clean bifurcation between two important photochemical reactions through competition of a triplet state Type II H-abstraction reaction with a photo-Favorskii rearrangement for (o/p)-hydroxy-o-methylphenacyl esters that depends on the water content of the solvent has been established. The switch from the anhydrous Type II pathway that yields indanones to the aqueous-dependent pathway producing benzofuranones occurs abruptly at low water concentrations (~8%). The surprisingly clean yields suggest that such reactions are synthetically promising.