A series of 3-diazoalkanediones, when treated with a catalytic quantity of a rhodium(II) carboxylate, were found to afford oxabicyclic dipolar cycloadducts derived by the trapping of a carbonyl ylide intermediate. The reaction involves generation of the 1,3-dipole by intramolecular cyclization of the keto carbenoid onto the oxygen atom of the neighboring keto group. Both five- and six-ring carbonyl ylides are formed with the same efficiency. A study of the tandem cyclization-cycloaddition cascade of several alpha-diazo ketoesters was also carried out, and the cascade sequence proceeded in high yield. When the interacting keto carbonyl group was replaced by an imido group, the rhodium(II)-catalyzed reaction proceeded uneventfully. In contrast, alpha-diazo amidoesters do not undergo nitrogen extrusion on treatment with a Rh(II) catalyst. Instead, the diazo portion of the molecule undergoes 1,3-dipolar cycloaddition with various dipolarophiles to give substituted pyrazoles as the final products.