PURPOSE: To obtain a β-keto ester useful for synthesizing a hetero ring for medicines and agricultural chemicals by reacting a glycine ester in the presence of a nitrosyl compound in an acidic double layer system composed of an organic solvent and an aqueous solution and reacting the reactional product with an aldehyde in the presence of a tin catalyst.

CONSTITUTION: A glycine ester of formula I (R1 is alkyl) or its mineral acid salt is reacted in the presence of a nitrosyl compound (e.g. sodium nitrite) in a double layer system composed of an organic solvent (e.g. methylene chloride) and an aqueous solution under an acidic condition, the separated organic solvent layer is dehydrated and a diazoacetic ester of formula II as the reactional product in the organic solvent layer is reacted with an alkylaldehyde (e.g. propionaldehyde) of the formula R2-CHO (R2 is alkyl) by using a catalytic amount of anhydrous stannous chloride to give the objective β-keto ester (e.g. ethyl propionylacetate) of formula III useful as a raw material for producing medicines, agricultural chemicals, etc.