Aminobenzaldehydes bearing a pendant 3,5-dinitrophenyl group react thermally with N-substituted α-amino acids to form unprecedented benzoazepine-fused isoindolines. The reaction proceeds via a dearomatization/rearomatization sequence involving an intramolecular (3 + 2)-cycloaddition between the in situ formed azomethine ylide and the dinitroarene. Various glycine derivatives are tolerated as well as branched substrates based on cyclic, α-mono-, and α,α-disubstituted amino acids, giving single diastereomers in many cases. The method is scalable and gives products with a nitro group ready for further manipulation.