Monte Carlo (MC) and ab initio analytical gradient MO techniques are used to study solvent effects on a solvent-assisted reaction. The mechanism of the acid-catalyzed rearrangement of α-acetylenic alcohol to a, /5-unsaturated carbonyl compounds is examined. A careful analysis of MC samples simulating hydration effects strongly suggests solvent caging to be the mechanism required to convert the in vacuo reactant and product of the rate-limiting step (RLS), which are unstable species (saddle points) on the energy hypersurface, into transient species able to play a mechanistic role. MC solvation of the transition structure of the RLS for the oxygen-protonated 3-methyl-but-l-yn-3-ol plus one water molecule (minimal solvated model, MSM-TS) is analyzed. Thereafter, passive and active solvent effects on a simplified model (methyl groups are replaced by hydrogen atoms) of the MSM-TS have been studied by adding another solvent water molecule at a Pulay 4-21G basis set level. The supermolecule results show that the MSM-TS and the ancillary water molecule produces a hilltop which better describes the molecular steps leading to the allenol form rather than to represent a solvated TS in the RLS. Mechanistically, the transition state for the RLS may be obtained from the solvated reactant by the jump of one solvent molecule toward its nucleophilic center. From the results of MC simulations, it is apparent that the unrelaxed solvation shell is less efficient in solvating the MSM-TS than the relaxed one. The relaxation of the solvation shell around the poorly solvated MSM-TS opens the channel to the final products, i.e., to a, /3-unsaturated carbonyl compounds. © 1989, American Chemical Society. All rights reserved.