An efficient copper-catalyzed dearomative [3 + 2] annulation of indoles with 2-iodoacetic acid is developed. By employing Cu(OTf)2/2,2'-bis(2-oxazoline) as the catalyst and LPO as the oxidant, a series of indoline-fused butyrolactones were synthesized in moderate to good yields. The reaction features mild conditions, a broad substrate scope, and readily available starting materials. Furthermore, synthetic transformations of the products were conducted to demonstrate the practical utility of this reaction.