In this study, a new environmentally benign iodine-mediated one-pot iodocyclization/alkylation strategy for the synthesis of benzo[b]thiophene derivatives starting from 2-alkynylthioanisoles was developed. The synthesis of a diverse population of 2,3-disubstituted benzo[b]thiophenes was achieved in high yields by employing moderate reaction conditions using 1,3-dicarbonyl substrates as the nucleophile and various substituted propargyl alcohols as both the cyclization precursor and the alkylating agent. This method resulted in the formation of a series of complex structures obtained in a single step. Additionally, a strategy was devised for the one pot iodocyclization/oxidation of propargyl alcohols into carbonyl functionalized benzo[b]thiophene structures. These green one-pot reaction processes were designed to reduce wastes and byproducts while generating a complex substitution pattern on the benzo[b]thiophene structure. The reported methodologies may be used to synthesize more functionalized benzo[b]thiophene structures that can be used in both biomedical and organic electronic applications.