[reaction: see text] The three-carbon alpha,alpha'-annulation of a sterically hindered cyclic beta-keto ester can be achieved by alkynylation with 3,3-diethoxypropyne, syn reduction of the alkyne with Co(2)(CO)(8) and Et(3)SiH, and an intramolecular aldol reaction. The method is potentially useful for the synthesis of nemorosone, hyperforin, and other polycyclic polyprenylated acylphloroglucinols.