A simple and efficient one‐pot three‐component reaction between hexamethyl phosphorous triamide and dimethyl acetylenedicarboxylate (DMAD) in the presence of CH‐acids, such as acetylacetone, 1,3‐indandione, dibenzoylmethane, anthrone, and N,N‐dimethylbarbituric acid, has been studied. In all cases, new and stable phosphorus ylides are obtained in excellent yields. These stable ylides exist in solution as a mixture of two geometrical isomers as a result of restricted rotation around the carbon–carbon partial double bond, resulting from conjugation of the ylide moiety with the adjacent carbonyl group. From the reaction of N,N‐dimethylbarbituric acid with DMAD in the presence of hexamethyl phosphorous triamide, a 1,4‐diionic organophosphorus compound is obtained. © 2012 Wiley Periodicals, Inc. Heteroatom Chem 24:84–89, 2013; View this article online at http://wileyonlinelibrary.com. DOI 10.1002/hc.21067