A synthetic method to prepare tetrahydroquinoline‐4‐carboxylic acid esters has been developed through the transition‐metal‐catalyzed intramolecular aromatic C−H functionalization of α‐diazoesters. Both [{Pd(IMes)(NQ)}2] (IMes=1,3‐dimesitylimidazol‐2‐ylidene, NQ=1,4‐naphthoquinone) and the first‐generation Grubbs catalyst proved effective for this purpose. The ruthenium catalyst was found to be the most versatile, although in a few cases the palladium complex afforded better yields or selectivities. According to DFT calculations, Pd0‐ and RuII‐catalyzed sp2‐CAr−H functionalization proceeds through different reaction mechanisms. Thus, the Pd0‐catalyzed reaction involves a Pd‐mediated 1,6‐H migration from the sp2‐CAr−H bond to the carbene carbon atom, followed by a reductive elimination process. In contrast, electrophilic addition of the ruthenacarbene intermediate to the aromatic ring and subsequent 1,2‐proton migration are operative in the Grubbs catalyst promoted reaction.