In contrast to the well‐studied 1‐vinylcyclobutanols, the reactivity of 3‐vinylazetidin‐3‐ols 1 and 3‐vinyloxetan‐3‐ols 2 under transition metal catalysis remains largely unexplored. We report herein their unique reactivity under dual palladium and acid catalysis. In the presence of a catalytic amount of Pd(OAc)2(PPh3)2, AgTFA and triflic acid, the reaction of 1 or 2 with aryl iodides affords 2,3,4‐trisubstituted dihydrofurans, which are valuable heterocycles in organic synthesis. Mechanistic studies reveal that this arylative ring‐expansion reaction proceeds via a domino process involving Heck arylation of alkene, acid‐catalyzed transposition of allylic alcohol and ring opening of the azetidine/oxetane by an internal hydroxyl group.