Reaction of dichlorobenzaldazine (2) with sodium azide followed by 1-propanethiol/Et3N furnished tetrazine ylide 1 as the main product. The structure of this unprecedented ylide was confirmed with single-crystal X-ray analysis [C17H17N5S, monoclinic P21/n a = 6.8294(4) Å, b = 13.6781(9) Å, c = 17.5898(12) Å, β = 90.666(1)°, Z = 4] and favorably compared with the results of ab initio calculations. The mechanisms of formation of the ylide and its thermal decomposition to 2,5-diphenyltetrazine (5) were investigated using ab initio methods and correlated with the experimental observations. The results suggest that formation of 1 involves intramolecular cyclization of a nitrile imine and thermolysis of 1 might generate a sulfenylnitrene. The formation of 1 is considered to be the first example of a potentially more general reaction.