We report the synthesis of a niobium cyclopropyl complex, Tp^Me₂NbMe(c-C₃H₅)(MeCCMe), and show that thermal loss of methane from this compound generates an intermediate that is capable of activating both aliphatic and aromatic C-H bonds. Isotopic labeling, trapping studies, a detailed kinetic analysis, and density functional theory all suggest that the active intermediate is an η²-cyclopropene complex formed via β-hydrogen abstraction rather than an isomeric cyclopropylidene species. C-H activation chemistry of this type represents a rather unusual reactivity pattern for η²-alkene complexes but is favored in this case by the strain in the C3 ring which prevents the decomposition of the key intermediate via loss of cyclopropene.