The potential energy surface (PES) for the formation of tropylium and benzylium ions from toluene cation (1) has been explored theoretically. Quantum chemical calculations at the B3LYP/6-311++G** and G3//B3LYP levels were performed. A pathway to form o-isotoluene (5-methylene-1,3-cyclohexadiene) cation (5) from 1 was found. The isomerization occurs by two consecutive 1,2-H shifts from CH3 to the ortho position of the aromatic ring via a distonic benzenium cation (2), which is also an intermediate in the well-known isomerization of 1 to cycloheptatriene cation (4). Since the barrier for the formation of 2 is the highest in the two isomerization pathways, 1, 4, and 5 are interconvertible energetically prior to dissociation. The benzylium ion can be produced via 5 as well as from 1 and the tropylium ion via 4. Rice-Ramsperger-Kassel-Marcus model calculations were carried out based on the obtained PES. The result agrees with previous experimental observations. From a theoretical analysis of kinetics of the isomerizations and dissociations, we suggest that 5 plays an important role in the formation of C7H7+ from 1.