A variety of 2-hydroxybenzophenones on reaction with Corey-Chaykovsky reagent underwent unprecedented rearrangements leading to 3-substituted benzofurans 8 and one-carbon homologated compounds 9 and 12. Compounds 9 could further be quantitatively transformed to 2-substituted benzofuran derivatives 10. (c) 2008 Elsevier Ltd. All rights reserved.