4-Hydroxy-6-methyl-2-pyrone (triacetic acid lactone)(1) is efficiently alkylated at C-3 with primary and secondary allylic substrates under thermodynamic control by using palladium (0) catalysts. Controlled hydrogenation of the resulting allylated derivatives affords pyrones with saturated chains at C-3. Allylic alkylations occur with retention of configuration at the allylic center, probably through a reversible kinetically favored 0-alkylation.