The asymmetric synthesis of γ-azido trans-cyclopropyl ketones is accomplished via a short, simple and efficient sequence. The cyclopropanation step is achieved by an intramolecular nucleophilic ring closure, with a diphenylphosphinate leaving group, to give trans-cyclopropane exclusively. β-Keto-diphenylphosphine oxides cyclise to form optically active dihydrofurans. All possible diastereoisomers of dihydrofurans can be prepared selectively starting from the same olefin.