The first synthesis of (+)-austamide (1), (+)-deoxyisoaustamide (2), and (+)-hydratoaustamide (10) by a very direct route is described (Scheme 1). Starting from tryptophan methyl ester (3) intermediate 5 is generated in two steps in >98% overall yield. The key step in the synthesis is a novel cyclization of 5 involving organopalladium intermediates which gives the dihydroazocine 6. From this key intermediate the target structures are accessible in just a few steps as shown in Scheme 1. The remarkable conversion of 5 --> 6 can be rationalized by the mechanistic pathway shown in Scheme 2 that involves a multistep sequence which includes palladation, cyclization, and rearrangement.