A method for the synthesis of densely substituted 4-pyrrolin-2-ones by Rh(II)-catalyzed denitrogenative transannulation of 1-alkyl-4-aryl-1H-1,2,3-triazoles with diazo esters has been developed. The reaction proceeds via an attack of the rhodium-bound carbene at the N2 atom of the triazole and the formation of unstable 3,4-dihydro-1,2,4-triazine, which further undergoes ring contraction to a 4-pyrrolin-2-one under rhodium catalysis. The method is inapplicable to 1,2,3-triazoles with primary alkyl substituent at C4, which afford stable 1,2,3-triazol-3-ium ylides as the main products.