The merger of strain-release of 1,2-oxazetidines with carboxylic acid directed C-H activation in catalytic synthesis of isoindolinones is reported for the first time. This reaction opens a new and sustainable avenue to prepare a range of structurally diverse isoindolinone skeletons from readily available benzoic acids. The success of late-stage functionalization of some bioactive acids, and concise synthesis of biologically important skeletons demonstrated its great synthetic potential in drug discovery. Mechanistic studies indicated a plausible C-H activation/β-carbon elimination/intramolecular cyclization cascade pathway.