A novel method for the construction of a cyclopenta[c]quinoline ring via cyclization of 3-bromoindoles with internal alkynes in the presence of palladium is described. The formation of the cyclopenta[c]quinoline ring is proposed from a double [1,5] carbon sigmatropic rearrangement of the spirocyclic cyclopentadiene intermediate, which is generated in situ from the cyclization of 3-bromoindoles with internal alkynes involving a sequential double alkyne insertion into the carbon-palladium bond and dearomatization of indole. The present studies have developed a novel ring-expansion reaction of the pyrrole ring to pyridine via one carbon insertion into the C2-C3 bond of indoles and provided a simple and distinct route for the construction of tricyclic fused-quinoline derivatives that are not easy to access with conventional methods.