Recently, a novel photochemical reaction of pseudocycloaddition of nitriles to mixed phosphonium-iodonium ylides 1 was found. Nitriles R 1 CN give corresponding oxazoles (2) with a high yield, with PhI (3) being a leaving group. The mechanism of the photoinduced cycloaddition of acetonitrile to mixed phosphonium-iodonium ylide 1 was studied by steady-state and time-resolved methods with resolution from 10 ns to 20 ms. The formation of photolysis products, substituted oxazole 2, and phosphonium salt 4, occurs in parallel reactions. The primary photochemical processes for the formation of 2 and 4 are the heterolytic and homolytic C-I + Ph bond cleavage in the excited singlet state of 1, respectively. Three transient species with lifetimes on microsecond and millisecond time scales were observed. The mechanism of the formation of major and minor products of the photolysis was suggested. Addition of water to the reaction mixture in acetonitrile changes the ratio of the products in favor of the phosphonium salt formation. The effect of water was accounted for by the acid catalysis of the homolytic C-I + Ph bond cleavage and the acceleration of the salt formation.