A process for preparing 6-hydroxy-3,4-dihydroquinolinone by intramolecular Friedel-Crafts alkylation of N-(4-methoxyphenyl)-3-chloropropionamide in which an equivalent of N-(4-methoxyphenyl)-3-chloropropionamide is contacted with a Lewis acid in DMSO or a high boiling amide or amine at an elevated temperature of from about 150 C. to about 220 C. is provided. The process produces 6-HQ in high yield and a high state of purity such that it may be used in subsequent reactions toward the preparation of cilostazol without intermediate purification. A process for preparing cilostazol from 6-hydroxy-3,4-dihydroquinolinone prepared by the process and improved processes for preparing N-(4-methoxyphenyl)-3-chloropropionamide are also provided.