A novel and efficient synthetic approach to substituted 2-iodo-spiro[indene-1,1'-isobenzofuran]-3'-ones has been developed via an iodine-promoted cascade cyclization of 2-(3-hydroxy-3,3-diarylprop-1-yn-1-yl)benzoates. This sequential cascade process is concisely conducted at room temperature. Subsequent palladium-catalyzed Sonogashira, Suzuki, and Heck reactions of the resulting iodides proceed smoothly