Cyclopropane-fused lactones are highly desirable in drug and natural products synthesis. Herein, we report on a photochemical, chemoselective reaction of aryldiazoacetates with allylic alcohols that furnishes cyclopropane-fused lactone skeletons efficiently in one step. The diastereoselectivity of the protocol was precisely controlled, and chemoselective cyclopropanation of allylic alcohols via free carbene intermediate followed by transesterification constitutes a series of bicyclic lactones in high yield without the formation of ether byproducts via typical O-H insertion reactions.