The utilization of cyclobutanones as the synthon in transition metal catalysis has been made great success. Because C(carbonyl)−C bond of cyclobutanones can be cleaved through strain release. Despite those advancements, the main catalysts in literature are Rh catalysts or Ni catalysts and the reaction with C–H bond is still underdeveloped. Herein, we realized the first palladium-catalyzed skeletal reorganisation of cyclobutanones invoving successive cleavage of C(carbonyl)−C bonds and C−H bond cleavage, which con-stitutes an rapid access to diverse indanones.