The allylic azide rearrangement experimentally studied by Sharpless group were investigated using density functional theory (DFT) methods at the M06-2X/6-31 G(d) level of theory. This sigmatropic process is concerted and occurs synchronously. The equilibrium populations were estimated from free energies of regioisomers involved in the rearrangement process. The estimated ratios of the regioisomers from computations were well consistent with the observed values. In particular, the influence of the hydrogen bonding on the stability of the transition states and regioisomers, during the course of the allylic azide rearrangement, was described by DFT calculations in detail. Computational results also supported the feasibility of the selective interception of the equilibrating isomers in the rearrangement by the azide-alkyne cycloaddition.