A methodology that involves the Pd-catalyzed direct C(sp2)-H bond carbonylation of the C2 position of indole has been introduced for the synthesis of indolo[1,2-a]quinoxalin-6(5H)-ones. The methodology developed herein was used for the synthesis of pyrrolo[1,2-a]quinoxalin-4(5H)-ones. The reaction of N-substituted 2-(1H-indol-1-yl)anilines or 2-(1H-pyrrol-1-yl)anilines and carbon monoxide in the presence of Pd(OCOCF3)2 as a catalyst and Cu(OAc)2 as an oxidant in toluene at 80 °C forms the corresponding quinoxalinones as exclusive products in good yields. The catalytically active C-H activated intermediate Pd complex was isolated and characterized for the first time which on exposure to CO gas in toluene at 80 °C gave the corresponding quinoxalinone derivative. On the basis of isolation of the intermediate, a possible mechanism has been proposed for the C-H activated direct carbonylative annulation of 2-(5-methoxy-1H-indol-1-yl)-N,4-dimethylaniline. This journal is © 2020 The Royal Society of Chemistry.