The [4+1] cyclization reaction of 2-hydroxylimides and trimethylsulfoxonium iodide was investigated. This cyclization reaction exhibits wide scope and compatibility with functional groups. The 3-amino-2,3-dihydrobenzofurans were obtained in reasonable to high yields under mild conditions. This methodology was utilized to synthesize highly substituted 3-amino-2,3-dihydrobenzofuran derivatives.