An efficient rhodium catalyzed [4 + 1]-annulation of o-acylanilines with 3-diazoindoline-2-imines has been successfully accomplished for the synthesis of spiroindolines in good to excellent yield. The reaction occurs through formation of Nylide followed by cyclization and showed good tolerance to various functional groups. Gram-scale synthesis, diastereoselective construction of tetrasubstituted indoline, synthesis of spirooxindole, and isolation of potential intermediates have also been demonstrated.