Migratory insertion of benzylidene carbene ligands into arylpalladium(II) species generates η(3)-benzylpalladium intermediates that can cyclize to generate five- and six-membered rings with new sp(3) centers. The reaction tolerates a range of arene functional groups and stabilized enolates. The products generated through this reaction are 1-arylindanes and 1-aryltetralins that are common to a range of natural products.