A DBU/AgOTf relay-catalyzed one-pot reaction of 2-alkynylbenzaldehydes and α-diazo esters for the efficient construction of 1,3-dihydroisobenzofuran derivatives has been documented. This protocol can tolerate a wide range of substrates and its scalability is demonstrated by the gram-scale reaction. Moreover, the obtained 1,3-dihydroisobenzofurans can be converted to indanone derivatives by a AgOTf-catalyzed ring recombination process. Both of the resulting products, 1,3-dihydroisobenzofurans and indanones, are important structural units of a variety of pharmaceuticals and natural products, and their structures are clearly confirmed by single crystal X-ray diffraction analysis.