A quantum chemical investigation of the solvent effects on the competition between the Wolff transposition and 1,2-H-shift in -hydroxy-ketocarbenes in aqueous solution was carried out at the B3LYP/6-31G** level of theory. The inclusion of solvent effects by means of a continuum model was not able to reproduce the experimental yields. Then, a semidiscrete approach consisting of solute-solvent association complexes embedded in a dielectric continuum was used to estimate the solvent influence on the Gibbs activation energies. The calculated ∆G are 0.88 and 4.94 kcal/mol for the 1,2-H-shift and the Wolff transposition processes, respectively, thus rendering a 100% yield for the formation of the vinyl-ketone product in agreement with experiment. The TS for the 1,2-H-shift process is preferentially stabilized by solvent due to a H-bond between the migrating hydrogen and one of the water molecules in the association complex. This effect of solvent is analyzed by means of hybrid QM/MM calculations using a classical description of water molecules with the TIP3P model.