A palladium-catalyzed cascade cross-coupling of acetanilide and toluene for the synthesis of ortho-acylacetanilide is described. Toluene derivatives can act as effective acyl precursors (upon sp(3)-C-H bond oxidation by a Pd/TBHP system) in the oxidative coupling between two C-H bonds. This dehydrogenative Pd-catalyzed ortho-acylation proceeds under mild reaction conditions.