A rhodium-catalyzed tandem reaction of alkynyl cyclobutanols with salicylaldehydes has been developed. The reaction offers a new and atom-economical approach for the selective preparation of multisubstituted 2-(2-oxo-2phenylethyl)cyclopentanone in high yields under mild reaction conditions with tolerance of a broad range of substituted alkynyl cyclobutanols and salicylaldehyes. The isolation of intermediate suggests that the reaction proceeds through a sequential process of intermolecular hydroacylation and semipinacol rearrangement.