Tetrahydrobiphenylene consists of cyclobutene fused with benzene and cyclohexene rings. In this paper, a direct method for synthesizing tetrahydrobiphenylenes based on a palladium (Pd)(0)-catalyzed C(sp2)–H functionalization was investigated. The developed method was applied to the synthesis of several tetrahydrobiphenylenes having an oxygen functionality at the ring juncture. The derivatization of a tetrahydrobiphenylene is also reported.