A convenient ipso substitution method for the preparation of benzo[c]quinolizine (2) and 4-hydroxy-3-(2'-pyridyl)coumarin (3) has been developed. The intramolecular nucleophilic substitution reaction of 3-oxo-2-(2'-pyridyl)-(2-halophenyl)propanoate (1) in refluxing xylenes gives initially benzo[c]quinolizine, while further heating results in the formation of 4-hydroxycoumarin. A mechanism has been proposed to rationalize the two competitive reaction pathways, and the role of HCl is discussed. Under optimized conditions, seven benzo[c]quinolizines and five coumarins were prepared in moderate to good yields.