A novel unprecedented triphenylphosphine-mediated [4 + 3] annulation reaction of 2-benzylidene indane-1,3-diones and -diynoates through initial phosphine α-addition was discovered and found to result in biologically interesting indeno[1,2-b]oxepin-4-ylidenes in up to 75% yield. The seven-membered separable Z and E isomeric oxepins were confirmed using single-crystal X-ray diffraction.