Isotopic labeling experiments were performed to elucidate a new mechanism for racemization in Prins cyclization reactions. The loss in optical activity for these reactions was shown to occur by 2-oxonia-Cope rearrangements by way of a (Z)-oxocarbenium ion intermediate. Reaction conditions such as solvent, temperature, and the nucleophile employed played a critical role in whether an erosion in enantiomeric excess was observed. Additionally, certain structural features of Prins cyclization precursors were also shown to be important for preserving optical purity in these reactions.