Unusual acid cleavage reactions are reported for derivatives containing acylated N-methyl-alpha-aminoisobutyryl (NMeAib) residues. The bond linking the NMeAib residue to the following amino acid is cleaved. Through X-ray diffraction studies of the NMeAib containing molecules, we have shown that the carbonyl oxygen atom of the preceding residue is in proximity to the carbonyl carbon of the NMeAib residue. Thus, it can act as an internal nucleophile leading to a cleavage reaction by way of an oxazolinium ion intermediate. Kinetic experiments for the cleavage reaction were carried out on a series of benzoyl dipeptide derivatives (p-X-C6H4C(O)-NMeAib-Phe-OMe) where X is varied from NO2 to Cl. The value of rho = -1.335 for the Hammett linear free-energy relationship strongly supports the intermolecular oxazolinium intermediate proposed.