Rh(II)-catalyzed decomposition of certain cyclic α-diazocarbonyl compounds in the presence of cyclic ethers has been shown to give bicyclic ring expansion products. These are thought to arise from a [1,4]-alkyl shift toward the carbonyl oxygen atom and are in contrast with the recently observed spirocyclic products of a Stevens-type [1,2]-alkyl shift within the postulated oxonium ylide intermediate. Quantum chemical calculations performed at the B3LYP/6-31G* level of theory showed that the former reaction pathway (toward fused bicycles) is kinetically preferred.