A new, highly regio- and stereospecific S(N)2' substitution reaction between a zirconium oxo complex and allylic chloride has been achieved. The resulting allylic alcohol or TBS-protected allylic ether products were isolated in good to excellent yields with a wide range of E -allylic chlorides. A mechanism for the S(N)2' allylic substitution consistent with kinetic, stereochemical, and secondary isotope effect studies was proposed.