[reaction: see text] The palladium-catalyzed arylation of the alpha-methylene-gamma-butyrolactone proceeds in good yields and may be directed toward the synthesis of 3-benzylfuran-2(5H)-ones when the starting aryl iodides contain strongly electron-withdrawing groups. The combined palladium-catalyzed arylation/hydrogenation of the alpha-methylene-gamma-butyrolactone represents a new simple entry into functionalized alpha-benzyl-gamma-butyrolactones.