The mechanism of formation of azetidine and oxetane in (6-4) photoproducts between thymine and imine-type cytosine is studied using the MPWB1K and B3LYP functionals together with the 6-31G(d,p) and 6-311++G(d,p) basis sets, in vacuum and bulk solvent. The photoinduced cycloaddition displays favorable energy barriers in the triplet excited state for formation of both azetidine and oxetane. The stepwise cycloaddition in the triplet excited state involves the initial formation of a diradical followed by ring closure via singlet-triplet interaction. The distinguishing feature in the formation of azetidine compared to that of oxetane is an intermediate H3' back-transfer to N3', which is a low-barrier exothermic reaction, and thus shifts the energy balance toward azetidine formation.