[reaction: see text] An efficient and highly stereoselective synthesis of functionalized trisubstituted E-olefins from cyclopropyl carbinol derivatives via a Julia-type olefination mediated by an intriguing Lewis acidic system consisting of CeCl(3).7H(2)O and NaI in refluxing acetonitrile is reported. This facile olefination allows for the iterative incorporation of methylcyclopropyl ketone as a C(5) prenylation synthon in the synthesis of acyclic terpenoids, as demonstrated in the facile synthesis of plaunotol 6E-isomer 12, a biologically significant diterpene diol, and naturally occurring diterpene 17.