(Chemical Equation Presented) Substituted 1,3-dihydro-2H-isoindoles (2, isoindolines) were prepared and subjected to palladium-catalyzed formate reduction. Alkyl isoindolines were reduced to 4,5,6,7-tetrahydro-2H-isoindoles (1). Only partial reduction was observed for 5-methoxyisoindoline, and 4-methoxy-, 5-carbomethoxy-, amino-, and amidoisoindolines were inert to the reaction. Halogen-substituted isoindolines were dehalogenated and reduced to 4,5,6,7-tetrahydro-2H-isoindoles. Isoindole 24 was also reduced to a mixture of an isoindoline and a 4,5,6,7-tetrahydro-2H-isoindole. In contrast, 2,3-dihydro-1H-indoles 21 underwent dehydrogenation to give thermodynamically stable indoles. Theoretical calculations show the significant difference in aromaticity between isoindoles and indoles, corresponding to the observed differences in reactivities. Tetrahydro-2H-isoindoles 1 were oxidized to 4,5,6,7-tetrahydroisoindole-1,3-diones in the presence of NBS and air.