A broad range of isonitrile-functionalized 3,4-dihydropyridin-2-ones could be prepared using a four-component reaction between phosphonates, nitriles, aldehydes, and isocyanoacetates. The reaction involves initial formation of a 1-azadiene intermediate which is trapped in situ by an isocyanoacetate to give the desired heterocyclic scaffold through cyclocondensation. The full scope and limitations of this four-component reaction are described. Variation of the nitrile and aldehyde inputs proved to be extensively possible, but variation of the phosphonate input remains limited. Regarding the isocyanoacetate, alpha-aryl isocyanoacetates give moderate to high yields and result in a complete diastereoselectivity for the 3,4-cis isomer. Alpha-alkyl isocyanoacetates gave the corresponding dihydropyridin-2-ones in moderate yields, most of them as mixtures of diastereomers. Elevated temperatures during cyclocondensation generally increased the yield and resulted in a change of the diastereomeric ratio in favor of the cis-diastereomer. In addition to isocyanoacetates, a limited number of other alpha-acidic esters resulted in the formation of dihydropyridin-2-ones, albeit in much lower yield. Computational studies show that the observed difference in yield cannot be simply correlated to specific physical properties (including acidity) of the different alpha-acidic esters.