A novel reductive biotransformation pathway for β,β-disubstituted nitroalkenes catalyzed by flavoproteins from the Old Yellow Enzyme (OYE) family was elucidated. It was shown to proceed via enzymatic reduction of the nitro-moiety to furnish the corresponding nitroso-alkene, which underwent spontaneous (non-enzymatic) electrocyclization to form highly strained 1,2-oxazete derivatives. At elevated temperatures the latter lost HCN via a retro-[2 + 2]-cycloaddition to form the corresponding ketones. This pathway was particularly dominant using xenobiotic reductase A, while pentaerythritol tetranitrate-reductase predominantly catalyzed the biodegradation via the Nef-pathway.