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Polycyclic indole structures, possessing fused seven-membered rings were efficiently synthesized via the Pd-catalyzed intramolecular carbopalladation-annulation of 3-(2-iodobenzyl)-indoles and alkynes. A remarkable base effect on the chemoselectivity of this transformation has been found: switching from Et3N to CsOAc completely reverses the reaction path to intramolecular cyclization forming fused five-membered rings.