For nearly 30 years, considerable research effort has been focused on the development of methods for catalytic (3 + 2) cycloaddition reactions of palladium-oxyallyl species with alkenes. However, because C−O bond formation is kinetically favored, the (3 + 2) cycloadditions achieved to date have involved C−O reductive elimination. We herein report a method of lithium triflate-promoted (3 + 2) cycloaddition reactions of palladiumoxyallyl species with 1,3-dienes that proceed via a pathway terminated with C−C bond formation to give a five-membered carbocycle. Coordination of the lithium ion with the alkoxide moiety disrupts the C−O reductive elimination and forms a metalenolate tethered π-allyl-Pd. The π-allyl-Pd moiety then accepts intramolecular allylic attack from the enolate moiety to form carbocyclic products. Furthermore, by tuning the steric properties of the palladium ligand, we could also accomplish the competing (4 + 3) cycloadditions, and thus this method provides regiodivergent access to both cyclopentanones and cycloheptanones. The reaction mechanism was investigated by DFT calculation and the origins of the regioselectivities of the cycloaddition were rationalized.