A series of 3‐spirocyclopropanedihydro‐ and ‐tetrahydropyrid‐4‐ones have been synthesized by nitrone cycloaddition to 1,1′‐bicyclopropylidene (BCP), chemoselective reduction of the N–O bond of the isoxazolidine ring, and PdII‐catalyzed cascade rearrangement of the β‐aminocyclopropanol derivatives into the final products. The new tetrahydropyridone derivatives were also prepared by thermal rearrangement of the isoxazolidines. (© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2008)