Allyl carbonates (Z)‐8 and (E)‐9 are available from the addition of the chiral alkenyllithium reagent 5b to aromatic aldehydes 6. When sujected to a palladium‐catalyzed substitution by sodium malonate, (Z)‐carbonates 8 give diesters 10 and 11, whereas (E)‐carbonate 9 predominantly leads to the diastereomeric product 12. The latter is converted into (S)‐γ‐butyrolactone 13 in a three step sequence. When the same protocol is applied to the isomeric diesters 10 and 11, (R)‐lactones 13 result. A rationale for the stereochemical outcome of the allylic substitutions in the carbonates 10‐12 is offered, based on π‐σ‐π interconversions of the palladium complexes 20‐23.