Herein, we describe the first electrophilic diazomethylation of ketone silyl enol ethers with diazomethyl‐substituted hypervalent iodine reagents that gives access to unusual β‐diazocarbonyl compounds. The potential of this unexplored class of diazo compounds for the development of new reactions was demonstrated by the discovery of a rare Rh‐catalyzed intramolecular 1,3 C–H carbene insertion that led to complex cyclopropanes with excellent stereocontrol.