The Rh(II)-catalyzed reaction of dimethyl diazomalonate with aryl aldehydes and beta-nitrostyrenes results in the formation of highly substituted tetrahydrofurans. The reaction may be considered to involve the Huisgen dipolar cycloaddition of the carbonyl ylide, generated from the dicarbomethoxycarbene and the aldehyde, to the beta-nitrostyrene. The diastereoselectivity of the reaction may be attributed to the concerted nature of the carbonyl ylide cycloaddition.