Combination of iron(III) chloride and diorganyl diselenides was used for cyclization of arylpropiolates and arylpropiolamides in formation of 3-organoselenyl-2H-coumarins and 3-organoselenyl-quinolinones, respectively. Systematic study to determine the ideal conditions revealed that the two substrates reacted in the same way using identical reaction conditions. The versatility of this method has been demonstrated by extension of the best reaction conditions to substrate having a variety of substituents. Analyses of the optimization reaction also showed that diorganyl diselenides have a dual role by acting as cycling agent and base to restore the aromatic system. Mechanistic investigation studies and analyses of the products obtained have revealed that the cyclization reactions follow an initial 6-endo-dig process to give the six-membered heterocycles without involving an intramolecular ipso-cyclization route.