The reaction of diazo(aryl)methyl(diaryl)phosphine oxides with aldehydes and ketones generates benzo-δ-phosphinolactones in low to good yields with 1,1-diarylalk-1-enes as byproducts under microwave irradiation. Diazo(aryl)methyl(diaryl)phosphine oxides first undergo a Wolff rearrangement to form diaryl(aryl)phosphenes, which further react with aldehydes and ketones to afford benzo-δ-phosphinolactones and β-phosphinolactones. The latter are unstable under heating and fragment into the corresponding 1,1-diarylalk-1-enes and arylphosphine dioxides under reaction conditions. The arylphosphine dioxides become arylphosphonic acids during workup. The periselectivity in the annulation shows that the reaction of diaryl(aryl)phosphenes with most aldehydes and ketones favors phosphene phenyl participation in (4 + 2) annulation over (2 + 2) annulation.