The olefins PhR2C·CH:CH2(R = Ph or Me) undergo oxidative cyclisation to give the corresponding 1,1-disubstituted indenes when treated with palladium(II) acetate in acetic acid at 80°. Evidence is adduced that reaction does not occur via the expected oxypalladation adducts and that little or no carbonium-ion character is generated in the olefinic carbon skeleton during reaction. The probable pathway involves a relatively slow intramolecular electrophilic aromatic substitution within a π-olefin complex.