Spin Transfer in Exclusive<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" display="inline"><mml:mi>Λ</mml:mi></mml:math>Production from<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" display="inline"><mml:mrow><mml:mrow><mml:mover><mml:mrow><mml:mi>p</mml:mi></mml:mrow><mml:mrow><mml:mo>→</mml:mo></mml:mrow></mml:mover></mml:mrow></mml:mrow><mml:mi mathvariant="italic">p</mml:mi></mml:math>Collisions at<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" display="inline"><mml:mn>3.67</mml:mn><mml:mi/><mml:mi>GeV</mml:mi><mml:mi>/</mml:mi><mml:mi mathvariant="italic">c</mml:mi></mml:math>

We report the first polarization transfer measurements for exclusive hyperon production reactions. The normal spin transfer coefficient ${D}_{\mathrm{NN}}$ for $\stackrel{\ensuremath{\rightarrow}}{p}p\ensuremath{\rightarrow}{\mathrm{pK}}^{+}\stackrel{\ensuremath{\rightarrow}}{\ensuremath{\Lambda}}$ is large and negative for forward $\ensuremath{\Lambda}$ production at a beam momentum of $3.67\mathrm{GeV}/c$, a result qualitatively consistent with expectations for a mechanism dominated by kaon exchange and rescattering. The sign of ${D}_{\mathrm{NN}}$ is opposite to that observed in the fragmentation regime for inclusive $\ensuremath{\Lambda}$ production at much higher energies.