A cyclopropanation reaction involving iodonium ylides generated in situ allows for efficient preparation of substituted 1-nitro-1-carbonyl cyclopropanes. This robust cyclopropanation reaction can be performed in organic solvents, biphasic aqueous media, or under solvent-free conditions with alkene substrates. The iodonium ylides generated in situ display some surprising differences in reactivity when compared to alpha-nitro-alpha-diazocarbonyl compounds. They do not undergo O-H insertion reactions and exhibit reduced reactivity with certain alkenes. [reaction: see text]