A highly selective synthesis of xanthones and indanediones via the addition of 3-sulfonyl phthalide to aurones and auronimines under temperature-controlled reaction conditions has been demonstrated. While the reaction of phthalide with aurone in the presence of Cs2CO3 in THF at 0 °C favors the formation of indanedione, the favored product is xanthone at reflux temperature. On the other hand, the phthalide reacts with auronimine in the presence of Cs2CO3 in THF at room temperature to afford the Michael adduct but provides indanedione in the presence of KOtBu in THF under reflux conditions. The plausible mechanism suggests that the spiro-naphthoquinone that emerges from the [4 + 2] cycloaddition. Hauser-Kraus annulation serves as the key intermediate in the formation of both xanthone and indanedione via a cascade of rearrangements. Furthermore, the smooth conversion of aurone-derived indanedione to xanthone under reflux conditions in THF suggested that the former is the kinetic product, whereas the latter is the thermodynamic product.