A palladium-catalyzed benzoquinone C-H functionalization/cyclization strategy with terminal alkynes was employed for the synthesis of some biologically relevant 2,3-disubstituted 5-hydroxybenzofuran derivatives. The benzoquinone acts as a reactant as well as an oxidant. During the process, an additional alkyne functionality can be introduced at the C3 position of the benzofuran. Base, ligand, and external oxidant are not required in this protocol.