A practical and efficient synthesis of racemic dialkyl (2-substituted-3-oxo-2,3-dihydro-1H-isoindol-1-yl) phosphonates has been developed via the three-component reaction of 2-formylbenzoic acid, various primary amines and trialkyl phosphites, using propylphosphonic anhydride (T3P®) as the condensing agent. The one-pot reaction was easily performed in boiling ethyl acetate.