Reaction of phenacyl anthranilate (1) with diethyl (ethoxymethylidene)malonate afforded phenacyl 2-[2,2-di(ethoxycarbonyl)vinyl]amino}benzoate (2) which on heating in polyphosphoric acid underwent degradation. Thermal cyclization of 2 in diphenyl ether gave phenacyl 3-(ethoxycarbonyl)-4-oxo-1,4-dihydroquinoline-8-carboxylate (4). The phenacyl group did not cyclize even on prolonged heating at 250 °C. Heating in sulfuric acid resulted in hydrolysis of the ethyl ester under formation of 4-oxo-8-[(phenacyloxy)carbonyl]-1,4-dihydroquinoline-3-carboxylic acid (6). The structure of 4 was confirmed by an independent synthesis.