The development of efficient methods for the synthesis of heterocyclic compounds is always of great importance for chemists. In this perspective, we describe a general approach for the synthesis of functionalized heterocyclic via Ugi MCR followed by intramolecular ylide initiated Michael reaction, In this case, the reaction proceeds via in-situ generated phosphorus ylides. We especially emphasize the importance of tuning the Ugi adduct for the points of molecular diversity by designing intramolecular ylide initiated Michael reaction with chromone based Ugi adduct as Michael acceptor, 2-chloro acetic acid as acid component in Ugi reaction that helps for in-situ generation of phosphorus ylides that allows formation of a different class of heterocyclic stable ylides. The Ugi reaction with 3-formyl chromone, amine, isocyanide and 2-chloro acetic acid with equimolar quantity at classical Ugi conditions in methanol 1M under microwave irradiation for 10 min to obtain Ugi adduct which susbsequentially reacted with tripheylphosphine that generates phosphonium salt based Ugi adduct as intermediate that undergoes nucleophilic conjugate addition at 2nd position of chromone  to obtain a highly functionalized stable ylide by ring opening of chromone moiety in good to moderate yields.