In this work, we present a carbonylative Sonogashira reaction of o-ethynyl benzyl alcohols and aryl iodides, followed by a cyclization process to selectively give carbonylmethylene isobenzofurans in high yields and in an atom-economic fashion. The reaction can be carried out in the absence of CuI, with a small amount of PdCl2(PPh3)2 (0.2–0.5 mol-%), using aryl iodides bearing both electron-withdrawing and electron-donating groups. Of the two possible stereoisomeric products, Z-isobenzofuran derivatives were obtained as major products. But, when the reaction was extended to a secondary alcohol, an interesting switch in stereoselectivity was observed