An unusual ring-contraction rearrangement to give spirocyclopropanes from fused cyclobutanols (see scheme) has been developed. It is found that the strain energy of the substrates derived from an additional fused ring and the stereoelectronic effect of the migrating a bond are important factors. It is noteworthy that the rearrangement proceeds in a stereospecific manner. Moreover, the method provides a spiro(cyclopropane indane) framework from tricyclo[6.3.0.02,5]undecane, which corresponds to illudane and the protoilludane skeleton.