It was shown that 3-phenyl-3-(2-aminoethyl)phthalide (6, R = H) and its N-methyl analog (6, R = CH3) existed in the amino lactone form in solution at room temperature. In the absence of solvents, however, these compounds underwent a spontaneous transformation into the 5-phenyl-2,3,4,5-tetrahydro-1H-2-benzazepin-1-ones (8, R = H, CH3) which suffered dehydration in sulfuric acid with the formation of 5-phenyl-2,3-dihydro-1H-2-benzazepin-1-ones (9, R = H, CH3).This benzazepine synthesis can be considered to be analogous to the known (12–15) conversion of 1-aminomethylphthalides (11) to 4-hydroxy-3,4-dihydroisocarbostyrils (13).