A complete switch in the Cp*Ir(III)-catalyzed paths between C-H olefination and hydroarylation was found to be crucially dependent on the type of directing groups. This dichotomy in product distribution was correlated to the efficiency in attaining syn-coplanarity of olefin-inserted 7-membered iridacycles. Theoretical studies support our hypothesis that the degree of flexibility of this key intermediate modulates the beta-H elimination, which ultimately affords the observed chemoselectivity.