Rh(III)-catalyzed C-H activation assisted by an oxidizing directing group has evolved to a mild and redox-economic strategy for the construction of heterocycles. Despite the success, these coupling systems are currently limited to cleavage of an oxidizing N-O or N-N bond. Cleavage of an oxidizing C-N bond, which allows for complementary carbocycle synthesis, is unprecedented. In this article, α-ammonium acetophenones with an oxidizing C-N bond have been designed as substrates for Rh(III)-catalyzed C-H activation under redox-neutral conditions. The coupling with α-diazo esters afforded benzocyclopentanones, and the coupling with unactivated alkenes such as styrenes and aliphatic olefins gave ortho-olefinated acetophenoes. In both systems the reactions proceeded with a broad scope, high efficiency, and functional group tolerance. Moreover, efficient one-pot coupling of diazo esters has been realized starting from α-bromoacetophenones and triethylamine. The reaction mechanism for the coupling with diazo esters has been studied by a combination of experimental and theoretical methods. In particular, three distinct mechanistic pathways have been scrutinized by DFT studies, which revealed that the C-H activation occurs via a C-bound enolate-assisted concerted metalation-deprotonation mechanism and is rate-limiting. In subsequent C-C formation steps, the lowest energy pathway involves two rhodium carbene species as key intermediates.