A palladium-catalyzed intramolecular decarboxylative cyclization of α-aryl-γ-methylidene-δ-valerolactones, followed by olefin isomerization, has been developed to give fused polycyclic aromatic compounds under mild conditions. The process described here can be regarded as a formal decarboxylative allylic arylation without using a pre-formed organometallic nucleophile. The reaction can be conducted on a gram scale and the products thus obtained are further derivatized with ease.