A synthetic strategy for forming multisubstituted naphthalenes based on hydride shift mediated C(sp3)-H bond functionalization was developed. This strategy consists of three successive transformations: (1) an intramolecular hydride shift mediated C(sp3)-H bond functionalization; (2) a decarboxylative fragmentation; and (3) an oxidation reaction. When benzylidene malonates having a 2-alkoxyethyl group at the ortho position were treated with a catalytic amount of Al(OTf)3, the hydride shift/cyclization reaction proceeded smoothly to afford tetralin derivatives in good chemical yields. The resulting tetralins were easily converted into naphthalenes by exposing them to modified Krapcho decarboxylation reaction conditions (LiCl, DMSO, and heating under an O2 atmosphere). The one-pot operation of these two reactions was also realized.