The reactivity of allylic phosphorus ylides generated in situ from alkoxycarbonylmethylenephosphoranes and propiolates is investigated toward isocyanates and aromatic aldehydes, which leads to one-pot multicomponent benzannulations for efficient synthesis of polysubstituted anilines and biaryls, respectively. The mechanism may involve a tandem [2+2] cycloaddition/fragmentation/Wittig/cyclization/elimination/aromatization sequence.