[reaction: see text] A novel and selective palladium-catalyzed annulation of 2-alkynylphenols method for the synthesis of 2-substituted 3-halobenzo[b]furans is presented. In the presence of PdX(2), CuX(2), and HEt(3)NX, 2-substituted 3-halobenzo[b]furans were selectively obtained as the major products. The mechanism of the reaction was also discussed.