The reaction involves an intramolecular aldol condensation. The starting compound is a diketone with carbonyl groups at positions 1 and 5. In basic conditions, the more acidic alpha-hydrogen (from the methylene group) is deprotonated. This enolate ion attacks the carbonyl carbon of the other ketone, forming a new carbon-carbon bond and a six-membered ring (cyclohexenone), which is highly favorable. This is followed by dehydration to give the conjugated enone, the major product.

The major product is the one with the conjugated system: