Metal-catalyzed in situ functionalization of ammonium ylides has emerged as a mild and atom/step economy strategy for the construction of complex building blocks. Despite the success, these trapping reactions are limited to activated polar double bonds such as (α,β-unsaturated) carbonyl derivatives. Trapping of ammonium ylides with nonpolar double bonds, which allows the all-carbon quaternary center, is unprecedented. In this article, an efficient stereoselective palladium-catalyzed intramolecular trapping of N-ylides derived from o-vinylaniline and α-diazocarbonyl compounds has been accomplished, a carbenylative hydroamination of alkenes. The present reaction allows the synthesis of various tri- and tetrasubstituted indolines in good yield with high diastereoselectivity. Important features are the construction of two contiguous quaternary carbon centers via the formation of C-N and C-C bonds in a single operation, high diastereoselectivity, wide functional group tolerance, and high atom and step economy. A reaction mechanism has also been explored by a combination of experimental and DFT studies, which revealed the formation of N-ylide followed by cyclization through metallo-ene-type reaction involving a six-membered cyclic transition state, where the diastereoselectivity is also established. © 2017 American Chemical Society.