An efficient and novel construction of diverse and polyfunctionalized γ-pyrones has been developed by InBr₃-catalyzed annulation of various cyclic and acyclic diazo compounds with multifarious active methylenes, 4-hydroxycoumarins, or 4-hydroxyquinolinone. This technique proceeds through a cascade of carbene generation/ketene formation/conjugate addition/intramolecular cyclization/elimination reactions. In addition, transformation of the synthesized compound for further functionalization is realized.