Herein we report an example of tandem oxidative acetoxylation/carbocyclization of arylallenes 1 using Pd(OAc)2. The catalytic protocol is highly selective and provides access to new C鈥揅 and C鈥揙 bonds leading to a carbocyclization. The reaction proceeds via C鈥揌 activation by Pd. Mechanistic investigations show that the C鈥揌 activation is not the rate-limiting step and indicate that the reaction proceeds via acetoxylation of the allene.