Abstract A new method for alkaloid synthesis is described. The rhodium (II)-acetate- catalyzed decomposition of 3-(4-acetoxyphenyl)-1-diazo-4-(pyrrol-1-yl)-2-butanone (5d) gave 6-(4-acetoxyphenyl)-5, 6-dihydro-7 (8H)-indolizinone (6d) in 82% yield via an intramolecular carbenoid reaction. The latter compound was converted in four steps in 13% overall yield to (±)-ipalbidine (1b).