The selective activation of aliphatic C–H bonds remains a fundamental challenge in synthetic chemistry. Here we disclose a palladium‐catalyzed cross‐dehydrogenative coupling (CDC) that joins the α‐carbon of β‐ketoesters with the C3‐benzylic position of indoles, forging C(sp 3 )‐C(sp 3 ) bonds under mild oxidative conditions. This transformation uncovers an unprecedented directing effect of indolic π‐system, which engages in coordination with palladium to guide site‐selective C(sp 3 )‐H activation via an agostic interaction. The developed protocol exhibits high tunability, a broad substrate scope, and high yields under mild conditions, underscoring its potential for late‐stage functionalization in pharmaceutical and materials science applications. The transformation integrates well into one‐pot and multicomponent processes as well as enables stereoselective functionalization of the steroid core. Mechanistic investigations, supported by kinetic analysis and DFT calculations, indicate that the transformation proceeds with the involvement of Pd(IV) intermediates, with product decomplexation identified as the rate‐determining step.
Nechaev et al. (Wed,) studied this question.