Palladium-catalyzed allylic alkylation of 2-aryl-1,3-dithianes at room temperature is described. A variety of cyclic and acyclic electrophiles successfully coupled with in-situ generated 2-sodio-1,3-dithiane nucleophiles to afford the allylated products in good to excellent yields (25 examples). Deprotection of these products leads to valuable beta,gamma-unsaturated ketones. Direct synthesis of such beta,gamma-unsaturated ketones via a one-pot allylation-oxidation protocol is also presented. Investigation into the stereochemistry of the allylation reaction revealed that the 2-sodio-1,3-dithiane nucleophile behaves as a "soft" nucleophile, which underwent external attack on the pi-allyl palladium complex to provide retention of stereochemistry (double inversion pathway). Additionally, the utility of this method was demonstrated through a sequential one-pot allylation-Heck cyclization to produce asterogynin derivatives, which are important bioactive compounds in medicinal chemistry.