Formation and rearrangement of several oxonium ylides containing cyclopropylcarbinyl migrating groups were studied. Efficient ring-contraction by [1,2]-shift to form cyclopropane-substituted cyclobutanones was observed, with no competing cyclopropane fragmentation. Substitution with the hypersensitive mechanistic probe (trans,trans-2-methoxy-3-phenylcyclopropyl)methyl led to cyclopropane fragmentation via an apparent heterolytic pathway, providing the first evidence for ion pair intermediates from ylide cleavage, and suggesting a possible alternative heterolytic mechanism for the Stevens [1,2]-shift.