[reaction: see text] A double diastereotopic differentiation strategy on a phosphonoacetate template is described. The approach utilizes Rh(2)(OAc)(4)-catalyzed intramolecular cyclopropanation (ICP) employing the (R)-pantolactone auxiliary in the ester functionality of the phosphonoacetate. The olefinic diastereofacial selectivity is governed by inherent electronic and steric interactions in the reacting carbene intermediate, while the group selectivity is dictated by the chiral auxiliary. This approach is being developed as an effective method to access bicyclic P-chiral phosphonates.