A protocol for the stereoselective synthesis of alkylidenephthalides and indanediones has been developed through the reaction of o-hydroxychalcones and their styrenyl analogues, respectively, with 3-sulfonylphthalide. The mechanism for the former synthesis involves Michael addition-E 2 elimination sequence, while the latter involves a [4 + 1] Hauser-Kraus annulation. The mechanistic studies reveal that the strategically positioned phenolic group plays a pivotal role in the observed reactivities. The alkylidenephthalides, which are latent 1,4dicarbonyl compounds, were further converted to triarylfurans under Paal-Knorr conditions in good to excellent yields. This protocol unravels several key features such as substrate specific product formation, namely, alkylidenephthalides from chalcones, and indanediones from vinylogous chalcones in their reaction with 3-sulfonylphthalide as well as the role of alkylidenephthalides as 1,4-dicarbonyl surrogates in Paal-Knorr furan synthesis.