A novel and efficient synthetic method for functionalized spiro[4.5]cyclohexadienones was developed based on the palladium‐catalyzed sequential process: Heck insertion to an allene–intramolecular ipso‐Friedel–Crafts allylic alkylation cascade. Using 5 mol% of palladium catalyst, a wide variety of spirocycles was obtained in good to excellent yields. The developed cascade process was also applicable to the synthesis of tetrahydronaphthalene derivatives.