Reaction of N-benzoyl-1,2,3,4-tetrahydroquinoline-2-carboxylic acid with acetic anhydride resulted in 1H,3H,5H-oxazolo[3,4-a]quinolin-3-one derivative 13. Different cyclopropanation processes were applied to 13, but only diazomethane in the presence of water furnished the hitherto unknown methyl 1,2,7,7a-tetrahydro-1aH-cyclopropa[b]quinoline-1a-carboxylate 14, which can be considered as a doubly constrained 1-aminocyclopropane-1-carboxylic acid system. The mechanism of the cyclopropanation was studied in detail. The new ACC ester 14 was transformed into fused tetracyclic hydantoin derivatives, which comprised a new type of heterocyclic system.