Substituted five-membered cyclic nitrones 1-3 cycloadd to substituted methylenecyclopropanes 4 and 5 with high diastereofacial selectivity, through anti-anti transition states, to produce regioisomeric hexahydrospiro-[cyclopropane-l,2(and 3)-pyrrolo[l,2-6]isoxazolidines] 6-11. 2-Spirocyclopropane derivatives undergo thermal rearrangement in mild conditions to 3,5-substituted indolizidinones 14,16, and 18, by the regioselective cleavage of the cyclopropane ring leading to the more stabilized secondary radical. Isomeric enaminones 15, 17, and 19, deriving from the same intermediate, are also formed in the rearrangement. Complete control of two out of the three stereocenters is achieved in thecycloaddition-rearrangement process for the disubstituted derivatives. This protocol is applied to a new synthesis of the skeleton of bicyclic indolizidine alkaloids (Gephyrotoxins). © 1990, American Chemical Society. All rights reserved.