The first Pd(II)-catalyzed sp(3) C-H olefination reaction has been developed using N-arylamide directing groups. Following olefination, the resulting intermediates were found to undergo rapid 1,4-addition to give the corresponding gamma-lactams. Notably, this method was effective with substrates containing a-hydrogen atoms and could be applied to effect methylene C-H olefination of cyclopropane Substrates.