Organophosphorus compounds are an omnipresent structural motif found in living organisms and biologically active compounds, and their facile synthesis is important in the preparation of synthetic intermediates, agrochemicals, and pharmaceuticals. Additionally, these compounds have continuously attracted great interest due to their role as bioisosteres of carbonyl and carboxylate groups. Accordingly, much effort has been devoted not only to construct skeletons of phosphorus compounds but also to introduce new functional groups onto these compounds. However, in contrast their acyclic analogs, the synthesis and application of phosphaheterocyclic compounds have been rarely investigated. We developed an efficient synthetic method for the selective preparation of dihydro-phosphaisocoumarins and their derivatives through a Pd-catalyzed oxidative cyclization reaction of a wide range of arylphosphonic acid monoethyl esters with activated and unactivated 1,3-dienes, including 1-aryl-substituted 1,3-dienes and 1-alkyl-substituted 1,3-dienes, thus opening a new avenue for the synthesis of phosphaheterocyclic compounds.