The palladium-catalyzed annulation reaction of alkynes enables an attractive approach to siloles. Their access from silirenes and terminal alkynes proved rather general, involving reactive intermediates that have remained elusive to date. Starting from 1,2-bis(3-thienyl)silirene as a source of photochromic siloles, the mechanism of the annulation reaction has been revisited, and palladasilacyclobutenes resulting from the activation of the silirene could be isolated and thoroughly characterized (NMR, X-ray, and DFT). Their role as reactive intermediates and their fate in the course of the reaction were also studied in situ. In combination with in-depth DFT calculations, a clearer picture of the mechanism and the reactive key species is disclosed.