Indolines and 2,3-dihydrobenzofurans are produced in good yields by the Pd(0)-catalyzed heteroannulation of cyclic and bicyclic alkenes by o-amino- and o-hydroxyaryl iodides. These processes are only successful with cyclic olefins in which the key alkylpalladium intermediate cannot undergo facile palladium beta-hydride elimination. These reactions appear to involve: (1) oxidative addition of the aryl iodide to the palladium catalyst, (2) arylpalladation of the olefin, (3) possible coordination of the internal nucleophile to the palladium, (4) formation of a six-membered palladacycle, and (5) reductive elimination of the organopalladium intermediate to give the heteroannulation product and regenerate Pd(0). (C) 2004 Elsevier B.V. All rights reserved.