The ring closure of 2‐iodo diaryl ether in the presence of a palladium catalyst to xanthone under carbon monoxide atmosphere is studied. A series of xanthones could be successfully obtained through this protocol, with Pd(OAc)2 as the catalyst, P(Cy)3 as ligand, PivONa.H2O as base, and PivOH and tetrabutylamonium bromide as additives in DMSO, in moderate to good yields.