1-lodo-2-lithiocarborane is an efficient precursor to carboryne. It can react with arenes to give different types of dearomatization products, [4+2] cycloaddition and/or cycloinsertion products, dependent upon the substituents on the aromatic rings. The formal cycloinsertion products, cyclooctatetraenocarboranes, is generated from the [2+2] cycloaddition intermediates followed by thermal [3,3] sigmatropic rearrangement. This novel dearomatization of arenes with carboryne also serves as an important method for the synthesis of cyclooctatetraenocarboranes.