Both indoles and benzo [b]furans can be obtained in high yield by the reactions of 2-iodoaniline derivatives and 2-iodophenols with terminal alkynes under mild conditions, namely in the presence of cuprous iodide (10 mol%) and a base in ethanol or 1,4-dioxane. Further investigation reveals that palladium contaminants as low as 100 ppb are responsible for these successful couplings. It is worth noting that simple aliphatic substituted terminal alkynes could be tolerated to smoothly produce indole and benzo [b]furan derivatives.