Chemoselective reduction of the strong P=O bond in the presence of weaker P–O (ester) and P–N (amide) bonds in phosphonic acid derivatives has constituted an unresolved problem in organophosphorus chemistry for years. This long‐standing problem is now solved for biologically relevant α‐hydroxy and α‐amino phosphonic as well as phosphinic acids esters and amides. The reduction of the P=O bond without concomitant scission of the ester and amide bonds is affected by use of BH3, a mild reducing agent, which affords the corresponding borane protected PIII phosphonite and phosphinite derivatives in one step. A mechanistic rationale is proposed for the role played by neighboring OH and NHR groups in facilitating the reduction, and for the observed chemo‐ and stereoselectivity. The reduction methodology described opens previously unavailable synthetic options in chemistry of α‐functionalized phosphonic and phosphinic acids by offering a unique possibility for direct modifications of oxidation level of the P‐center in these compounds.