A reaction of 2‐(2‐nitrobenzoylmethyl)‐1,3‐dioxolane (3) with hydroxylamine, followed by acid catalyzed cyclization, produced 5‐(2‐nitrophenyl)isoxazole (5) as the only isolable product, whereas 2‐(benzoylmethyl)‐1,3‐dioxolane (9) under identical conditions produced a 2.5:1 mixture of 3‐phenyl and 5‐phenylisoxazoles 10 and 11. These findings contradict the literature report that β‐keto ethyleneacetals on treatment with hydroxylamine produce exclusively 3‐substituted isoxazoles. As an additional proof, 3‐(2‐nitrophenyl)isoxazole (8) was prepared by an unambiguous method via the nitrile oxide route for comparison. The intermediate obtained on treatment of 2‐(2‐nitrobenzoylmethyl)‐1,3‐dioxolane (3) with hydroxylamine was found to be an isomeric mixture of 5‐hydroxy‐5‐(2‐nitrophenyl)‐2‐isoxazoline (4) and the syn and anti mono‐oximes 19 (at least in solution), either of which could give 5‐(2‐nitrophenyl)isoxazole (5) on acid treatment. A mechanistic rationale is provided to explain the anomalous results.