A straightforward and feasible palladium-catalyzed direct α-arylation of indane-1,3-dione to 2-substituted aryl/heteroaryl indene-1,3-diones has been disclosed for the first time. Optimization of reaction conditions identified tBu-XPhos as a preferred ligand for the bis(acetonitrile)dichloropalladium(II) catalyst. A broad spectrum of aryl iodides and aryl triflates containing electron-donating, electron-withdrawing