Remarkable reactivity reversal stratagem in 3,4-disubstituted butenolides under acidic conditions is described. Design of a suitably substituted multifunctional butenolide followed by an acid-catalyzed chemo- and diastereoselective intramolecular ring closure via the reactivity umpolung has been demonstrated to accomplish a concise total synthesis of paeonilide. Overall, the present protocol involves one-pot reduction of an a,alpha,beta-unsaturated carbon carbon double bond and intramolecular nucleophilic insertion of oxygen function at the electron-rich gamma-position of butenolide. The involved mechanistic aspects have also been discussed.