1,2‐ or 1,3‐Phenylene‐diphosphonium bis‐ylides have been prepared and their stabilities compared by analysis of the effects of the substitution pattern of the phenylene bridge and the steric hindrance of the P‐alkyl substituents in the diphosphonium precursors RPh2P+(C6H4)+PPh2R′ (R,R′ = Me, Et). In the o‐phenylene series, the vicinity of the phosphorus centers allows the distal P+/C– charge separation of the mono‐ylide intermediate to be canceled by the formation of a cyclic ylidophosphorane. The ring strain in the latter was released through phenylene–P(σ5) bond cleavage to afford relaxed diphosphonium bis‐ylides, which were isolated as carbodiphosphorane, or protonated in situ to form bis‐phosphonium ylides depending on the bulkiness of the P‐alkyl substituents. In the m‐phenylene series (with R,R′ = Me), the amplified distal P+/C– charge separation proved sufficient to stabilize the corresponding diphosphonium bis‐ylide as a chelating ligand of an RhI(CO)2 center, in a complex where the effective σ‐donation of the ligand was confirmed by comparison of the IR carbonyl stretching frequencies with those of the isostructural complex previously described in the o‐phenylene series