A palladium-catalyzed (3 + 2) annulation of 2-methylbenzoic acid with maleimide using Ac-Leu-OH as a powerful ligand has been reported. Through a site-selective γ-C(sp3)-H olefination reaction and a sequential decarboxylative cross-coupling reaction, a five-membered cyclic ring was obtained as the final product. This novel reaction features great site selectivity and reactivity to generate various cyclic products in moderate to good yields.