A palladium-catalyzed asymmetric tandem C-C bond activation/Cacchi reaction between cyclobutanones and o-ethynylanilines was reported. The transient chiral σ-alkylpalladium species generated via enantioselective C(sp3)-C(sp2) bond activation of cyclobutanones promotes cyclization of o-ethynylanilines, leading to one-carbon-tethered chiral indanone-substituted indoles. Two C-C bonds and one C-N bond are created with concomitant formation of an all-carbon quaternary stereocenter. Furthermore, a chiral C2-aryl axis can be created in 2,3-disubstituted indole moiety, leading to indanone-substituted indoles with both central and axial stereogenic elements.