Herein, we describe the synthesis of substituted oxepane derivatives through the skeletal remodeling of 4-hydroxy-2-cyclobutenones, which are readily prepared from commercially available dialkyl squarates upon their reaction with acrylonitrile. Mechanistically, a Rh(I)-catalyzed C-C bond formation and cleavage cascade is proposed. Specifically, a fused [3.2.0] bicycle is proposed to form from dialkyl squarate-derived cyclobutenols via an unusual Rh(I)-catalyzed intermolecular oxa-Michael addition of a tertiary alcohol with acrylonitrile, followed by an intramolecular conjugate addition/migratory insertion. Subsequent C(sp3)-C(sp3) bond cleavage through a Rh-catalyzed β-carbon elimination is then theorized to furnish the oxepane scaffold. Computational studies support the formation of an intermediate [3.2.0] bicycle but also point to an alternative pathway for the formation of the oxepane products involving a Rh(III) intermediate. Additional studies have shown the overall process to be stereoretentive. The functional groups that are introduced in this process can be leveraged to form fused or bridged ring systems.