A novel ring-expansion of methyl (arylhydroxymethyl)-cyclopropanecarboxylates 1 using Sc(OTf)(3) or BF3 center dot OEt2 afforded 1,2-dihydronaphthalene-3-carboxylic acid ester 2 in high to excellent yields. In the reaction, highly regioselective ring opening of cyclopropane and sequential cyclization occurred.