Dirhodium acetate catalyzed three-component reactions of aryl diazoacetates, alcohols or water, and 2-alkynals are reported to afford β-alkynyl α,β-dihydroxyl acid esters in good yield with high diastereoselectivity. Synthetic utility of the reaction was demonstrated in the conversion of the versatile alkynyl functionality to other synthetically useful compounds, including efficient synthesis of 2-aryl-2,3-dihydroxyl enelactones.