A novel Pd-catalyzed three-component domino reaction for the stereoselective synthesis of highly functionalized allyl cinnamates has been developed. In this protocol, a sequential process of C-C bond activation and intermolecular allylic substitution was well-organized. The key for this transformation is the in situ generated hydrolysis product of cyclopropenone, which triggered a new reaction with vinylethylene carbonates. The reaction mechanism was investigated, demonstrating the high stereoselectivity and excellent atomic economy in this process.