In the presence of acids, 1,4-dimethyl-1,4-dihydronaphthalene 1,4-endoperoxide readily reacts with nucleophiles to produce methyl- and ring-substituted naphthalenes in high yields. The regioselectivity observed depends on the nucleophile. The key intermediate is shown to be the corresponding hydroperoxy carbocation which could be intercepted in certain cases prior to aromatization. The hydroperoxide also undergoes Hock-type cleavage and dimerization giving 2,3-dihydro-1-benzoxepins, 4-methyl-1-naphthol, and a 1,2,5,6-tetraoxocane as by-products.