The first examples of 3,3‐diaryloxetanes are prepared in a lithium‐catalyzed and substrate dependent divergent Friedel–Crafts reaction. para‐Selective Friedel–Crafts reactions of phenols using oxetan‐3‐ols afford 3,3‐diaryloxetanes by displacement of the hydroxy group. These constitute new isosteres for benzophenones and diarylmethanes. Conversely, ortho‐selective Friedel–Crafts reactions of phenols afford 3‐aryl‐3‐hydroxymethyl‐dihydrobenzofurans by tandem alkylation–ring‐opening reactions; the outcome of the reaction diverging to structurally distinct products dependent on the substrate regioselectivity. Further reactivity of the oxetane products is demonstrated, suitable for incorporation into drug discovery efforts.