A new acid-catalyzed method for the synthesis of (Z)-3-butylidenephthalides 5 and a novel and general route to 3-alkyl-8-hydroxy/methoxyisocoumarins 6-8 from phthalides 9 is described. The hydroxyphthalides 4 and 10 were obtained by condensation of the phthalide anion with butyraldehyde and acetaldehyde. Reaction of hydroxyphthalides 4 with a mixture of orthophosphoric acid and formic acid gave the (Z)-3-butylidenephthalides 5, while the hydroxyphthalides 4 and 10 on reaction with p-toluenesulfonic acid provided the 3-alkylisocoumarins 6-8. The present approaches permit variation of the 3-substituent in isocoumarin and the pattern of functionalization on the aromatic rings of both isocoumarins and alkylidenephthalides.