New, highly-functionalized dihydrothiophenes are conveniently synthesized from the novel tandem, four-component reactions of 1,3-thiazolidinedione, aldehyde, arylamine, and ethyl cyanoacetate, catalyzed by triethylamine. The reaction mechanism involves the use of Knoevenagel condensation, Michael addition, and ring-opening of 1,3-thiazolidinedione, followed by intramolecular ring closure process. The reaction is diastereoselective and only trans-2,3-dihydrothiophenes were produced in moderate yields. The functionalized dihydrothiophenes can be converted efficiently to the corresponding thiophenes by DCC dehydrogenation reaction.