SmCl3 (20 mol%) has been used as an efficient catalyst for reaction between aromatic aldehydes and 5,5-dimethyl-1,3-cyclohexanedione at 120°C to give 1,8-dioxo-octahydroxanthene derivatives in high yield. The same reaction in water, at room temperature gave only the open chain analogue of 1,8-dioxo-octahydroxanthene. Use of eco-friendly green Lewis acid, readily available catalyst and easy isolation of the product makes this a convenient method for the synthesis of either of the products