(Chemical Equation Presented) Penam acids 6-8 [i.e., (2S,5R,6R)-, (2S,5S,6R)-, and (2S,5R,6S)-isomers of 6-(1,3-dihydro-1,3-dioxo-2H-isoindol-2- yl)-3,3-dimethyl-7-oxo-4-thia-1-azabicyclo[3.2.0]heptane-2-carboxylic acid] were prepared by deesterification of the corresponding methyl esters 2-4. The same methodology applied to ester 1 did not lead to the (2S,5S,6S)-isomer 5 but rather a 72% yield of the thiazoline derivative 9. High-resolution mass spectrometry analysis of the reaction headspace gases indicated that a stoichiometric amount of carbon monoxide is produced during the deesterification of 1. A mechanism for this decarbonylation reaction is proposed. This appears to represent a new type of fragmentation reaction for a penam carboxylic acid. The free energies of various reaction species along viable decarbonylation reaction coordinates for acids 5 and 7 were computed by using the density functional theory method IEFPCM/M06/6-31+G(d). Anionic and zwitterionic (neutral) variants of the proposed mechanism were considered, but each produced computed activation free energies deemed to be too high (>45 kcal/mol) to be experimentally relevant. The computed activation free energies for the protonated (cationic) variant of the mechanism were 17.3 kcal/mol for 7 vs 8.8 kcal/mol for 5. The value of this difference in energies of activation (ΔΔG‡) is quite consistent with experimental observations and supports the proposed mechanism. For a portion of the computed reaction coordinate that involves ring opening of the lactam ring by an internal carboxylic acid group to form a cyclic anhydride, the expected tetrahedral intermediate was circumvented by a direct (concerted) and facile N- to O-acyl migration event. Additional thermal gas-phase reaction products produced during gas chromatographic analysis of the penams 1-8 were characterized with high-resolution mass spectrometry, and possible mechanisms for their formation are presented.