Butadiene, carbon dioxide and ethylene oxide interact in the presence of palladium or rhodium catalysts to give (2′-hydroxyethyl)2-ethylidene-4,6-heptadienoate in a “one pot” reaction. When propylene oxide was used, two related isomeric esters with an additional methyl group in the alcohol part of the ester were obtained, in yields of up to 24%. Kinetic investigations suggest that the reaction occurs via the lactone 2-ethylidene-6-hepten-5-olide. The products are accounted for in terms of a mechanism involving the coordination of the oxirane to an allylic transition metal carboxylate complex and insertion of the oxirane to give an allylic alkoxy complex. Elimination of the products occurs via a hydrogen migration step.