An iron(II)-catalyzed bisphosphorylation cascade cycloisomerization of readily accessible γ-hydroxyl ynones and diphenylphosphine oxides is described. This strategy provides a variety of valuable polysubstituted bisphosphorylated dihydrofuran scaffolds via the construction of two C-P bonds and one C-O bond within a single procedure. This developed reaction system demonstrates good functional group compatibilities with considerably low catalyst consumption (as low as 1%), which could be further scaled up to gram quantities in satisfactory yields.