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In this work, an efficient palladium catalyzed annulation of 2-iodobiphenyl with a non-terminal alkene was developed. The key factor in this transformation was the formation of a highly reactive oxo-palladacycle intermediate, which was enabled by a neighboring hydroxyl group, and remarkably restrained the β-H elimination process. Mechanistically, control experiments demonstrated that the hydroxyl group may act as an anionic ligand, which was irreplaceable in this reaction. This transformation presented good reactivity and selectivity,