Methyl 2-iodobenzoates 1 a-c undergo cyclization reactions with various aromatic aldehydes 2 a-m (RC6H4CHO: R=H 2 a, 4-CH3 2 b, 4-tBu 2 c, 4-OMe 2 d, 3-OMe 2 e, 4-Cl 2 f, 4-CF3 2 g, 4-CN 2 h, 4-Ph 2 i; benzo[d][1,3]dioxole-5-carbaldehyde (2 j), 1-napthaldehyde (2 k), benzofuran-2-carbaldehyde (2 l), and isonicotinaldehyde (2 m)) in the presence of [CoI2(dppe)] (dppe=1,2-bis(diphenylphosphino)ethane) and Zn powder in dry THF at 75 degrees C for 24 h to give the corresponding phthalide derivatives 3 a-m and 3 q-t in good to excellent yields. Under similar reaction conditions, less reactive aliphatic aldehydes, heptanal (2 n), butyraldehyde (2 o), and 2-phenylacetaldehyde (2 p) also underwent cyclization reactions with 1 a to provide 3 n-p, respectively, in fair to good yields. The catalytic reaction can be further extended to cinnamyl aldehyde (2 q) with 1 a to give the corresponding phthalide derivative 3 u. This synthetic method is compatible with a variety of functional groups on the aryl ring of 2. The high efficiency of the cobalt catalyst containing a dppe (dppe=1,2-bis(diphenylphosphino)ethane) ligand encouraged us to investigate the asymmetric version of the present catalytic reaction by employing bidentate chiral ligands. Thus, aromatic aldehydes 2 a-c, 2 f, and 2 g undergo cyclization with 2-iodobenzoate (1 a) smoothly in the presence of [CoI2{(S,S)-dipamp}] ((S,S)-dipamp=(1S,2S)-(+)-bis[2-methoxyphenyl]phenylphosphino)ethane) and zinc powder in THF at 75 degrees C for 24 h, giving the corresponding (S)-phthalides 4 a-e in 81-89% yields with 70-98% ee. A possible mechanism for the present catalytic reaction is proposed.