The rhodium‐catalyzed hydroformylation of limonene (1) in the presence of PPh3 or P(O‐o‐tBuPh)3 as auxiliary ligands and pyridinium p‐toluenesulfonate, as an acid co‐catalyst, gave two diasteroisomers of 4,8‐dimethyl‐bicyclo[3.3.1]non‐7‐en‐2‐ol (3) in nearly quantitative yield. Limonene is a cheap natural product obtained commercially from citrus fruits, in particular, as a sub‐product of the orange juice industry; whereas alcohol 3 is an expensive perfume ingredient. Alcohol 3 is formed through the hydroformylation of 1 giving a corresponding aldehyde (2) followed by the intramolecular carbonyl ene reaction resulting in cyclization of the aldehyde. The cyclization step is highly stereoselective with only one diasteroisomer of 3 being formed from each of two diasteroisomers of 2. The use of the P(O‐o‐tBuPh)3 ligand not only remarkably accelerates the hydroformylation step compared to the system with PPh3, but also increases significantly the cyclization activity of the catalytic system.