The reactions of vinylidenecyclopropanes 1 with 1,1,3-triarylprop-2-yn-1-ols or their methyl ethers 2 in the presence of a Lewis acid selectively produce 4-dihydro-1H-cyclopenta[b]naphthalene derivatives 3 or 1,2,3,8-tetrahydrocyclopenta[a]indene derivatives 4 depending on the substituents on the cyclopropane. Good to high yields are obtained under mild conditions. A plausible cascade Meyer-Schuster rearrangement and Friedel-Crafts reaction mechanism has been proposed. Moreover, novel functionalized methylenecyclobutene derivatives 5 could also be obtained in moderate to good yields under similar conditions when strongly electron-donating methoxy groups were introduced into the benzene rings of 2.