A novel approach to coumarin derivatives has been developed starting from readily available 2-(1-hydroxyprop-2-ynyl)phenols, based on an unprecedented palladium-catalyzed dicarbonylation process. Reactions were carried out in the presence of catalytic amounts of PdI2 in conjunction with an excess of KI in MeOH as the solvent at room temperature and under 90 atm of CO to give 3-[(methoxycarbonyl)methyl]coumarins in good to high isolated yields (62-87%).