The thermal agglomeration of ultrathin (≪30 nm) single crystal silicon-on-insulator (SOI) films is a morphological evolution phenomenon with practical and scientific importance. This materials phenomenon represents both a critical process limitation for the fabrication of advanced ultrathin SOI-based semiconductor devices as well as a scientifically interesting morphological evolution problem. Investigations to date have attributed this phenomenon to a stress-induced morphological instability. In this paper, we demonstrate that SOI agglomeration is a surface-energy-driven dewetting phenomenon. Specifically, we propose that agglomeration occurs via a two-step surface-energy-driven mechanism consisting of (1) defect-mediated film void nucleation and (2) surface-diffusion-limited film dewetting via capillary edge and generalized Rayleigh instabilities. We show that this theory can explain all of the key experimental observations from the SOI agglomeration literature, including the locations of agglomeration initiation, the greater instability of patterned film edges, the destabilizing effect of decreasing silicon layer thickness and increasing temperature, the strikingly periodic silicon finger and island formation agglomeration morphology, and the scaling of agglomerated structure dimensions with the silicon layer thickness. General implications of this theory for the thermal stability of SOI and other common thin-film-on-insulator structures are also discussed.