A novel reaction for the synthesis of 2-acyl furans is reported. The reaction is believed to proceed by sequential addition of a trialkylphosphine to an ynenone, 5-exo-dig cyclization to form the furan, and oxidation of the resulting phosphonium ylide with molecular oxygen. Many common functional groups are tolerated during the reaction, and the products are obtained in good to excellent yield under the mild conditions. This methodology offers efficient access to biologically important compounds, including fused polycyclic compounds and furaldehydes, from simple starting materials.