Conditions are described for the Rh-catalyzed formation of highly functionalized dihydro- and tetrahydrofuran products via three-component reactions of aldehydes, alpha-alkyl-alpha-diazoesters, and dipolarophiles. The alkyl-substituted carbonyl ylides that are generated in this fashion are highly reactive in cycloaddition reactions and display a scope of reactivity that is much broader than the three-component reactions of carbonyl ylides derived from ethyl diazoacetate or alpha-aryl-alpha-diazoesters. The reactions of alkyl-substituted carbonyl ylides proceed with high regioselectivity and diastereoselectivity that are rationalized in terms of an asynchronous, endo-selective transition state.