The palladium-catalyzed reaction of 2-alkynylanilines and 2-alkynylphenols in the presence of carbon monoxide and methanol under basic conditions gave the sequential cyclization/ carbonylation products, methyl 2-substituted indole and benzo [b]-furan-3-carboxylates. Similar reaction of 2-alkynylbenzamides gave 3-alkylidenisoindole derivatives.