A palladium-catalyzed redox-neutral allylic alkylation of indoles with cyclopropyl acetylenes has been disclosed. Various 1,3-diene indolenine framework bearing a quaternary stereocenter at the C3 position were synthesized straightforwardly in good to excellent yields with high regio- and stereoselectivities. The reaction could be further expanded to the dearomatization of naphthols to synthesize functionalized cyclohexadienones with 1,3-diene motifs. The reaction exhibited high atom economy and good functional group tolerance.