A fast one-pot method has been developed for the direct preparation of 3-aryl-1,2-cyclohexanediones from 2,3-epoxycyclohexanone via a microwave-assisted tandem epoxy ketone isomerization-Heck arylation reaction. The preparative microwave-assisted reactions were performed preferentially in 50% aqueous poly(ethylene glycol) utilizing sodium acetate as the base. Within 5-30 min of directed microwave heating, employing less than 0.05 mol % of palladium acetate and no phosphine ligand, up to 72% yield of C3-arylated diketones was isolated in an overall environmentally benign process. On the basis of the chemical reactivity of proposed intermediates, a reaction pathway is proposed where the acetate base promotes the rearrangement of the 2,3-epoxycyclohexanone into the active mono-enol form of 1,2-cyclohexanedione. An alternative classically heated procedure for isomerization-C3-arylation of 2,3-epoxycyclohexanone in DMF is also reported.