While iodonium ylides are important reantants in a wide range of reactions, the exploration of electron‐transfer property of iodonium ylides remains an underdeveloped topic. Herein, we describe a direct cyclization of 1,3‐diketones with malonate‐based iodonium ylides to give a diverse array of dihydrofurans in moderate yields. The control experiments suggest that the electron transfer between enol and iodonium ylide gives reactive species, thus enabling a cyclization cascade process to take place to give dihydrofurans.