Condensation of [3‐(1‐methylethoxycarbonyl)‐2‐oxopropyl]triphenylarsonium bromide 8 with 7‐methoxy‐3,7‐dimethyloctanal 10 in the presence of a base gave bis(1‐methylethyl) 4,7‐dihydroxy‐2‐(6‐methoxy‐2,6‐dimethylheptyl)‐3,5,7‐cycloheptatriene‐1,3‐dicarboxylate 7b. The formation of 7b can be explained by a number of consecutive steps. The mechanism, strongly supported by liquid secondary ion mass spectrometry, suggests that an aldol condensation of the γ‐arsonium ylide 2b and the aldehyde 10 takes place as the initiating step and is followed by a Michael addition of the aldol product and the γ‐arsonium ylide 2b. Then an intramolecular nucleophilic substitution and elimination of triphenylarsine, followed by base‐catalyzed elimination of a second molecule triphenylarsine takes place to produce 7b. © 1998 John Wiley & Sons, Inc. Heteroatom Chem 9:411–418, 1998