An efficient, direct synthesis of pyrazolo[5,1‐a]isoindoles employing a palladium‐catalyzed intramolecular CH bond activation of 1‐(2‐halobenzyl)pyrazoles has been developed. The use of lithium chloride (LiCl) was found to be essential in these reactions, to suppress further CH bond activation at the C‐3 position of pyrazolo[5,1‐a]isoindole, when C‐3 is unsubstituted. This protocol can be applied to the synthesis of a pyrazolo[5,1‐a]isoquinoline possessing a six‐membered central ring system and a fully substituted pyrazolo[5,1‐a]isoindole using sequential intra‐ and intermolecular CH bond activation.