A novel gold-catalyzed water-mediated carbene cascade reaction of propargyl diazoacetates has been developed. Mechanistic investigation indicates that this reaction is initiated by gold-catalyzed gold-carbene formation followed by an unprecedented 6- endo-dig carbocyclization with tethered alkyne through an oxonium ylide intermediate, terminated by a β-H elimination/protodeauration process to give the aromatized furan products in good to high yields with broad substrate generality. Notably, the proposed gold-carbene intermediates are verified by interception experiments.