The reaction of 4-alkylidene-5(4H)-oxazolones 2a-e with ethyl 3-oxo-4-triphenylphosphoranylidene-butyrate 1 affords dihydrobenzoxazoles 3a-c and the diastereoisomeric 1,3-cyclohexanedione ylides 4a-e and 5a-e. 3a is oxidized to the corresponding benzoxazoles 7a,b with iodine