A novel process for synthesis of 1,2,6,7-tetrahydro-8H-indeno[5,4-b]furan-8-one, a key intermediate for preparation of ramelteon, a MT₁ and MT₂ melatonin receptor selective agonist, was developed. The key intermediate 3-(2,3-dihydrobenzofuran-5-yl)propanoic acid was synthesized by condensation of p-bromophenol with bromoacetaldehyde diethyl acetal in the presence of K₂CO₃ and Friedel-Crafts reaction to give 5-bromobenzofuran, which was subsequently subjected to Heck coupling reaction with methyl acrylate in the presence of palladium acetate, then catalytic hydrogenation and hydrolysis in one pot reaction. Subsequently, 1,2,6,7-tetrahydro-8H-indeno[5,4-b]furan-8-one was synthesized from 3-(2,3-dihydrobenzo- furan-5-yl)propanoic acid through bromination, Friedel-Crafts acylation and catalytic hydrogenolysis debromination. The overall yield was about 49.9%. The structures of intermediates and final product were determined by ¹H NMR, ¹³C NMR and HRMS techniques. This method has the advantages of easily available starting materials, simply conducted procedures, relatively high yield and easy purification, and is more suitable for scale-up production.