Palladium-catalyzed aerobic oxidative cyclizations of substituted 2-(1H-pyrrol-1-yl)phenols with isocyanides via an O-H/C-H insertion cascade have been developed. This strategy provides facile access to pyrrolo[2,1-c][1,4]benzoxazine derivatives in good to excellent yields under an O2 atmosphere. The notable features of this protocol include its mild reaction conditions, atom-economy, and broad functional group tolerance.