We describe a P-containing palladacycle-catalyzed regioselective Heck reaction of 2,3-dihydrofuran with diaryliodonium salts and aryl iodides to afford 2-aryl-2,5-dihydrofurans and 2-aryl-2,3-dihydrofurans, respectively, in good yields. Mechanistic studies revealed that the oxidative addition of diaryliodonium salts to palladacycles to form Pd(IV) species showed high chemoselectivity and that electron-rich aryl moieties were preferentially transferred to the Heck product. DFT calculations indicated that the regioselectivity-determining step is the reductive elimination reaction rather than the isomerization and reinsertion of Pd(IV)-hydride intermediates into the double bond.