Electrophilic allylation of phenolic substrates including salicylaldehydes with (α-hydroxy) allylphosphonates is presented. It is observed that catalytic FeCl3 is sufficient to accomplish the allylation. Interestingly, the reaction led to the formation of allylphosphonates in addition to vinylphosphonates, depending upon the substituent. The vinylphosphonates obtained here are E-isomers. More importantly, the reaction occurred regioselectively with respect to the phenolic substrates. Substituted allylphosphonates are formed when salicylaldehyde or (2-hydroxy-phenyl)arylmethanones are used. Conclusive proof for the formation of allylphosphontates as well as vinylphosphonates has been provided by single crystal X-ray crystallography. Regioselective allylation of phenolic substrates using phosphono-allyl alcohols was achieved by using even catalytic amounts of FeCl3. Both vinylphosphonates and allylphosphonates are obtained, the ratio depending upon the substrate.