A novel catalytic activation of the leaving group in the S(N)2 reaction is achieved as an extension of our mercuric triflate-catalyzed reactions. Derivatives of anilinoethyl 4-pentynoate reacted smoothly with catalytic amounts of Hg(OTf)(2) to give indoline derivatives in excellent yield with efficient catalytic turnovers under very mild conditions. The reaction of optically pure secondary alcohol derivatives resulted in inversion of stereochemistry, which is a definitive feature of the S(N)2 reaction. The procedure is applicable for benzoazepine synthesis.