On treatment with alkaline hydrogen peroxide (Weitz−Scheffer oxidation), the N‐(5,6,7,8‐tetrahydro‐2,5‐dioxo‐2H‐1‐benzopyran‐3‐yl)benzamides 1a−c afforded the N(4‐oxo‐4,5,6,7‐tetrahydro‐1‐benzofuran‐2‐yl)benzamides 2a−c in an unprecedented transformation. These hitherto unknown tetrahydrobenzofuran derivatives have been converted into 2‐hydroxy‐2‐(4‐oxo‐2‐phenyl‐4,5‐dihydro‐1,3‐oxazol‐5‐yl)cyclohexane‐1,3‐diones 3a−c by dimethyldioxirane oxidation. Proposed mechanisms for the formation of the furans 2a−c and the 2‐hydroxycyclohexane‐1,3‐diones 3a−c are offered. Structure elucidation of all new compounds has been performed by NMR spectroscopy. (© Wiley‐VCH Verlag GmbH, 69451 Weinheim, Germany, 2002)