A new approach for the synthetically important γ−functionalized enals has been developed. The strategy involves rhodium‐catalyzed direct C‐C & C‐S bond forming site‐selective γ−difunctionalization of diazoenals with aryl propargyl sulfides via sulfur ylide [2,3] sigmatropic rearrangement, resulting in the highly functionalized γ−allenyl(sulfanyl)enals in excellent yield at ambient temperature. This highly versatile approach constitutes a viable alternative to the remote carbonyl‐directed γ−functionalization of unmodified enals which suffer from competitive side reactions. The synthetic utility of the γ−allenyl(sulfanyl)enals was demonstrated by the InCl3‐catalyzed cycloisomerization to the trisubstituted furanyl‐enals via an unusual 1,4‐sulfanyl migration. In addition, an operationally simple and efficient one‐pot [3+2] annulation of diazoenals and propargyl sulfides, involving combined γ−difunctionalization and cycloisomerization was successfully developed for the diverse enal‐functionalized furans.