We report a catalytic strategy that generates rhodium-carbynoids by selective diazo activation of designed carbyne sources. We found that rhodium-carbynoid species provoke C(sp(2))-C(sp(2)) bond scission in alkenes by inserting a monovalent carbon unit between both sp(2)-hybridized carbons. This skeletal remodeling process accesses synthetically useful allyl cation intermediates that conduct to valuable allylic building blocks upon nucleophile attack. Our results rely on the formation of cyclopropyl-I (III) intermediates able to undergo electro-cyclic ring-opening, following the Woodward-Hoff-mann-DePuy rules.