Benzocyclobutenes (BCBs) are highly valuable compounds in organic synthesis, medicinal chemistry, and materials science. However, catalytic modular synthesis of functionalized BCBs from easily accessible starting materials remains limited. We report herein an efficient synthesis of diversely functionalized BCBs by a Pd(II)-catalyzed formal [2+2] annulation between arylboronic acids and alkenes in the presence of N-fluorobenzenesulfonimide (NFSI). An intermolecular carbopalladation followed by palladium oxidation, intramolecular C(sp2)−H activation by a transient C(sp3)−Pd(IV) species, and selective carbon−carbon (C−C) bond-forming reductive elimination from a high-valent five-membered palladacycle is proposed to account for the reaction outcome. Kinetically competent oxidation of alkylPd(II) to alkylPd(IV) species is important to avoid the formation of a Heck adduct. The reaction forges two C−C bonds of the cyclobutene core and is compatible with a wide range of functional groups. No chelating bidentate directing group in the alkene part is needed for this transformation.