Pd-catalyzed tandem cyclization/coupling of internal β-propargylic-β-ketoesters with (hetero)aryl bromides is described. Two protocols are established which selectively lead to 2-benzylidene-dihydrofurans, when isomerization is inhibited under mild conditions (temp. � 40 °C and weak base -K 2 CO 3 ), or to 2-benzylfurans when base-induced aromatization is enabled. A catalytic cycle involving oxidative addition, substitution of bromide with alkyne, rate limiting anti-selective 5-exo-dig oxocyclization followed by fast deprotonation of the oxonium intermediate, and reductive elimination is proposed based on detailed experimental and theoretical studies.