An efficient rhodium(III)-catalyzed direct C-H oxidative annulation of isoquinolones with allyl alcohols as C1 synthons has been successfully developed. This protocol enables the straightforward synthesis of structurally diverse isoindolo[2,1-b]isoquinolin-5(7H)-ones with high atom economy, tolerates a broad spectrum of functionalities, and is applicable to one-pot operation from readily available N-methoxybenzamides.