We report a catalytic strategy that generates rhodium-carbynoids by selective diazo activation of designed carbyne sources. We found that rhodium-carbynoid species provoke C(sp2)-C(sp2) bond scission in alkenes by inserting a monovalent carbon unit between both sp2-hybridized carbons. This skeletal remodeling process access synthetically useful allyl cation intermediates that conduct to valuable allylic building blocks upon nucleophile attack. Our results rely on the formation of cyclopropyl-I(III) intermediates able to undergo electrocyclic ring-opening, following the Woodward-Hoffmann-DePuy rules.