The biosynthetic origins of the structurally related racemic isoxazolidine Papaveraceae alkaloids Setigerumine I, Dactylicapnosinine and Dactylicapnosine have remained elusive since their original isolation over two decades ago. Herein we report the first biosynthetic hypothesis for their formation and, inspired by it, the first synthesis of (±)‐Setigerumine I with accompanying computational rationale. Based on the results, these isoxazolidine alkaloids arise from racemizing oxidative rearrangements of prominent isoquinoline alkaloids Noscapine and Hydrastine. The key steps featured in this synthesis are a room temperature Cope elimination and a domino oxidation/inverse‐electron demand 1,3‐dipolar cycloaddition of an axially chiral, yet configurationally unstable, intermediate. The work opens this previously inaccessible family of natural products for biological studies.