A Rh(I)-catalyzed intermolecular cyclization between isocyanates and benzocyclobutenols leading to isoquinolin-1(2 H)-ones through selective cleavage of a C-C bond has been realized. Exploiting the same strategy, we developed a Rh(I)-catalyzed three-component reaction of benzocyclobutenols, isonitriles, and sulfonyl azides to access isoquinolin-1(2 H)-imines. These procedures provide unique and expeditious access to isoquinolone derivatives which are otherwise difficult to prepare in satisfactory yields with excellent functional-group tolerance under mild reaction conditions.