Herein, we report an unprecedented Rh(III)-catalyzed C–H activation/annulation cascade of readily available enaminones with iodonium ylides towards the convenient synthesis of isocoumarins. This coupling system proceeds in useful chemical yields (up to 93%) via a cascade C–H activation, Rh-carbenoid migratory insertion and acid-promoted intramolecular annulation. The success of gram-scale reaction and diverse functionalization of isocoumarins demonstrated the synthetic utility of this protocol.