We report herein a zinc-catalyzed β-allylation of cyclopropanols with Morita–Baylis–Hillman (MBH) carbonates with retention of the cyclopropane ring. The reaction is promoted by a zinc aminoalkoxide catalyst, affording cyclopropyl-fused α-alkylidene-δ-valerolactone derivatives in moderate to good yields. Mechanistic experiments suggest that the present reaction does not proceed via direct β-C–H cleavage of the cyclopropanol, but involves zinc homoenolate and its enolization to generate a key bis-nucleophilic species. α-Allylation of this “enolized homoenolate” with MBH carbonate would be followed by regeneration of the cyclopropane ring and irreversible lactonization. The enolized homoenolate mechanism has also been proven to allow for β-functionalization with alkylidenemalononitrile as the reaction partner. A sequence of the present reaction and known cyclopropanol transformation provides an opportunity to transform a simple cyclopropanol into α,β- or β,β-difunctionalized ketones.