A new aerobic intramolecular palladium(II)-based catalytic system that triggers aminopalladation/dehydropalladation of N-sulfonylalkenylamides to give the corresponding methylidene γ-lactams has been identified. Use of triphenylphosphine and chloride anion as ligands is mandatory for optimal yields, and molecular oxygen can be used as the sole terminal oxidant. Scope and limitations of the methods are described. A mechanism is proposed on the basis of experimental results as well as density functional theory calculations.