Gold-catalyzed propargylic substitution of propargylic alcohols 1 with 1,3-dicarbonyl compounds 2 followed by cycloisomerization in ionic liquid enables the environmentally friendly synthesis of polysubstituted furans 3 in good-to-high yields. The reaction proceeds via the hydrated propargylic substitution product 3″aa. The gold catalyst can be recycled at least three times.