Stable pallada(II)cycles featuring Csp 2–Pd and Csp 3–Pd bonds reacted with vinyl- and alkynyl(phenyl)iodonium salts to generate two new geminal carbon–carbon bonds to the terminal carbon of the vinyl and alkynyl substituents providing benzofuran and dihydrobenzofuran heterocycles. The new annulation process was rationalized by the involvement of Pd(IV) intermediates arising via an initial oxidative addition of hypervalent iodonium electrophiles to the Pd(II) center. Reaction monitoring via low temperature 1H NMR spectroscopy was performed, and organopalladium(II) intermediates featuring a new Csp 2–Csp 2 or Csp 2–Csp bond were isolated and characterized, providing insights into the regiochemical course of the proposed mechanistic pathway.