We report the development of engineered myoglobin biocatalysts for executing asymmetric intramolecular cyclopropanations resulting in cyclopropanefused gamma-lactones, which are key motifs found in many bioactive molecules. Using this strategy, a broad range of allyl diazoacetate substrates were efficiently cyclized in high yields with up to 99% enantiomeric excess. Upon remodeling of the active site via protein engineering, myoglobin variants with stereodivergent selectivity were also obtained. In combination with whole-cell transformations, these biocatalysts enabled the gram-scale assembly of a key intermediate useful for the synthesis of the insecticide permethrin and other natural products. The enzymatically produced cyclopropyl-gamma-lactones can be further elaborated to furnish a variety of enantiopure trisubstituted cyclopropanes. This work introduces a first example of biocatalytic intramolecular cyclopropanation and provides an attractive strategy for the stereodivergent preparation of fused cyclopropyl-gamma-lactones of high value for medicinal chemistry and the synthesis of natural products.