Tetrahydro-3-benzazepines and tetrahydroisoquinolines are synthesized in one step from allenes and phenylethylamines or benzylamines, respectively. Mechanistically, it is assumed that activation of a C-H bond of an aromatic ring with Pd(II) occurs, directed by the primary amine, leading to the formation of a palladacycle into which an allene then undergoes insertion. The resulting π-allyl intermediate cyclizes to the products by an intramolecular allylic alkylation. The process is particularly useful with 2,3-butadienoates and amines having a quaternary carbon at the α-position.