A new methodology for the asymmetric synthesis of beta-hydroxy acid was developed. Dirhodium(II)-catalyzed C-H insertion of alpha-alkoxydiazoketone (3), which was prepared from primary alkyl halide (1) and readily available chiral alpha-hydroxy acid (2), gave stereoselectively 2,5-cis-disubstituted 3(2H)-furanone (4). The Baeyer-Villiger reaction of 4 followed by treatment with an acid afforded chiral