A palladium-catalyzed reaction of N-propargyl oxazolidines with alkenes for the synthesis of indolizidines has been developed. Through a sequential 6-exo-dig cyclization/proton transfer/[3+2] cycloaddition/cycloreversion/aromatization process, a series of fused polycyclic indolizines are obtained in moderate to good yields with high functional group tolerance. Experimental and theoretical studies suggest that the [3+2] cycloaddition/cycloreversion of the oxazolidine ring probably involves C-C and C-O bond cleavage, providing a new ring restructuring approach for the synthesis of heterocycles.