Vinylcyclopropanes (VCPs) are known to generate 1,3-dipoles with a palladium catalyst that initially serve as nucleophiles to undergo [3 + 2] cycloadditions with electron-deficient olefins. In this report, we reverse this reactivity and drive the 1,3-dipoles to serve as electrophiles by employing 3-alkylated indoles as nucleophiles. This represents the first use of VCPs for the completely atom economic functionalization of 3-substituted 1H-indoles and tryptophan derivatives via a Pd-catalyzed asymmetric allylic alkylation (Pd-AAA). Excellent yields and high chemo-, regio-, and enantioselectivities have been realized, providing various indolenine and indoline products. The method is amenable to gram scale and works efficiently with tryptophan derivatives that contain a diketopiperazine or diketomorpholine ring, allowing us to synthesize mollenine A in a rapid and ligand-controlled fashion. The obtained indolenine products bear an imine, an internal olefin, and a malonate motif, giving multiple sites with diverse reactivities for product diversification. Complicated polycyclic skeletons can be conveniently constructed by leveraging this unique juxtaposition of functional groups.