Reductive cyclization of 4-hydroxymethyl-5,5-dimethyl(or pentamethylene)-2,5-dihydrofuran-2-ones by the action of sodium tetrahydridoborate gave bicyclic compounds in which the lactone ring is fused to a cyclopropane ring. Hydrolysis of the products with aqueous sodium hydroxide resulted in the formation of the corresponding disodium cyclopropane-1,1-dicarboxylates, which reacted with alkyl halides to produce the diesters. Acid hydrolysis of the fused systems was accompanied by opening of the cyclopropane ring with formation of 4-chloromethyl-5,5-dimethyl-2-oxotetrahydrofuran-3-carboxylic acid.