We have established an in situ generated sulfonium-ylide mediated annulation to construct 2,3-disubstituted-2,3-dihydroindoles. The [4 + 1] annulation approach relied on Michael addition/substitution reactions. These reactions were carried out at ambient temperature to deliver dihydroindoles with excellent yields and diastereoselectivities. Moreover, the versatility of this approach allows for the introduction of various functional groups, enabling further diversification of the dihydroindoles. Also, the cascade approach was broadened to synthesize dihydrobenzofurans.