Hg(ClO4)2·3H2O, a cheap, water-tolerant, and stable salt, catalyzes the cycloisomerization reaction or α-allenols to 2,5-dihydrofurans in an efficient and selective manner. The reaction is general and can be applied to differently functionalized substrates, including alkyl-substituted, aryl-substituted, enantiopure, and tertiary allenols. In addition, density functional theory (DFT) calculations were performed to obtain insight into various aspects of the controlled reactivity of α-allenols under mercury catalysis. They suggest a dual activation of the allenol by the Hg complex that drives the reaction to the chemoselective formation of 2,5-dihydrofurans.