A novel catalytic cyclization reaction of alkynyl α-ketoanilide was developed by utilizing the [1,2]-phospha-Brook rearrangement. This reaction involves the generation of an amide enolate via the umpolung process, that is the addition of dialkyl phosphite to a keto moiety followed by the [1,2]-phospha-Brook rearrangement, and the subsequent intramolecular addition of the enolate to an alkyne to afford 3,4-dihydro-2-quinolone derivatives. Under high-temperature reaction conditions, further rearrangement of the allylic phosphate moiety occurs to provide 2-quinolone derivatives.