A cyclization of propargylic alcohols with tert-butyl nitrite at room temperature in air was achieved using Pd(OAc)2 as catalyst. The first reported 4-oxoisoxazoline N-oxides could be directly accessed from a range of multisubstituted propargylic alcohols in moderate to excellent yields under mild conditions. Density functional theory calculations indicated that the reaction proceeds through a palladium-catalyzed NO2 addition that efficiently generates a ketoxime radical, which eventually produces 4-oxoisoxazoline N-oxide.