The mechanism of diphosphate formation from (R)-2-chloro-2-oxo-5,5-dimethyl-4-(R)-phenyl-1,3,2-dioxaphosphorinane (5a) and 3-hydroxy-2-oxo-5, 5-dimethyl-4-(R)-phenyl-1,3,2-dioxaphosyphorinane (6) has been investigated. The products formed are the ax-au diphosphate 7a and the ax-eq diphosphate 7b, with no evidence in the P-31 NMR spectrum for pentacoordinate chlorooxyanionic phosphoranes 9. The structure of 7b has been established unambiguously by NMR spectroscopy, mass spectrometry, and elemental analysis, and the structures of 5a and 7a have been confirmed by X-ray crystallography. The mechanism of the crucial diphosphate-forming reaction has been probed using O-18-labeling studies. The O-18-labeling patterns are consistent with the unsymmetric ax-eq diphosphate 7b arising from selective nucleophilic attack of the axial oxygen of 6 on the chloride 5a with inversion of configuration at phosphorus. The symmetric ax-as diphosphate 7a can be formed directly, as a result of selective nucleophilic attack of the axial oxygen of 6 on the chloride 5a with retention of configuration, but the majority arises indirectly by isomerization of the ax-eq diphosphate 7b. The isomerization apparently involves intermolecular exchange, with nucleophilic attack of the phosphate anion 6 on the equatorially substituted phosphorus atom of 7b with inversion of configuration at phosphorus.