Oxidative fragmentation of tertiary cyclopropanols with phenyliodine(III) dicarboxylates in aprotic solvents (dichloromethane, chloroform, toluene) produces mixed anhydrides. The fragmentation reaction is especially facile with phenyliodine(III) reagents bearing electron-withdrawing carboxylate ligands (trifluoroacetyl, 2,4,6-trichlorobenzoyl, 3-nitrobenzoyl), and affords 95−98% yields of the corresponding mixed anhydride products. The latter can be straightforwardly applied for the acylation of various nitrogen, oxygen and sulfur-centered nucleophiles (primary and secondary amines, hydroxylamines, primary alcohols, phenols, thiols). Intramolecular acylation yielding macrocyclic lactones can also be performed. The developed transformation has bolstered the synthetic utility of cyclopropanols as pluripotent intermediates in diversity-oriented synthesis of bioactive natural products and their synthetic congeners. For example, it was successfully applied for the last-stage modification of a cyclic peptide to produce a precursor of a known histone deacetylase inhibitor.