A palladium-catalyzed highly regioselective C-H allylation/annulation reaction of N-sulfonyl amides with secondary or tertiary allylic alcohols has been developed to construct 3,4-dihydroisoquinolones bearing a synthetically valuable vinyl substituent. This cascade cyclization approach of allylic alcohols involving C-H allylation has not been reported previously. The commercially available allylic alcohol substrates, the only by-product of water, and the used terminal oxidant of O2 provide environmentally benign advantages.