The influence of the electron-donating aniline lone pair in the direct C-arylation step was then explored. We surmised that the acetylated substrate (16) would deactivate the Cring and render the C-arylation less efficient. This indeed occurred as highlighted by the formation of deacetylated Carylated regioisomers, 9a and 17, in 27% total yield (1.2:1.0 9a:17). We assume that deacetylation occurs in situ because of the high temperatures and in the presence of base in the reaction mixture. An unexpected result was the formation of the linear tetracyclic carbazole 17, arises from C-H activation of the isoquinoline 7-position of 16. The formation of 17 suggests that C-H activation of the 7-position is favored if the acetyl group is present prior to C-arylation. In contrast, if 7a is present -presumably formed by deactylation of 16 -C-H activation at the 5-position occurs. We speculate that the acetyl group (i.e., 16) directs C-H activation at this site via coordination of a Pd(II) species through the amide carbonyl. This series of reactions have guided us to propose that oxidative addition of the C-Cl bond in 7a occurs first and proceeds via a Pd(0) species to form 18 (Scheme 2e). Pd(II)catalyzed C-arylation forms the palladacycle (19) followed by tautomerization (20). Finally, reductive elimination produces the C-arylated product (9a).