Isoquinoline and quinoline have been discovered as novel ligands for palladium-catalyzed oxidative cascade cyclization reactions. With our new catalyst systems (Pd(OAc)(2)/isoquinoline or quinoline), unsaturated anilides cyclize under an oxygen atmosphere (1 atm) to furnish structurally versatile indoline derivatives in good yields. One C-N bond and two C-C bonds are formed in a single step with excellent diastereoselectivities (dr > 24:1).