A stereoselective dearomative cyclopentannulation of benzofurans is reported. A previously reported dearomative (3 + 2) cycloaddition of indoles with 1,4-dithiane-fused allyl cations was found to lack stereoselectivity when more substituted cyclopentene rings are targeted. However, for benzofuran substrates, excellent levels of stereoselectivity were observed for the same allyl cation reagents under very similar reaction conditions. In this full account, we provide a mechanistic rationale and some design principles that govern the stereoselectivity of the intriguing dearomative transformations using dithioallyl cations and demonstrate how the stereoselectivity depends on electronic factors of the starting materials. The stereoselective methodology is also applied in a straightforward dearomative synthesis of the tricyclic sesquiterpenoid natural product aplysin and its analogues, starting from a simple benzofuran.