A new method of synthesizing ortho‐methylated phenylalanines has been developed. Phenylalanines with at least one free ortho‐position undergo a Pictet—Spengler cyclization with formaldehyde followed by hydro‐genolytic splitting of the endocyclic benzylic C—N bond of 1,2,3,4‐tetrahydroisoquinolines and afford corresponding ortho‐methyl derivatives. Repeating this reaction sequence on the ortho‐substituted phenylalanines yielded ortho, ortho‐disubstituted derivatives, and pro‐substituted phenylalanines yielded ortho,para‐disubstituted analogs. Our modified method of cyclization preserved the configuration at the chiral center: hydrogenolysis, on the other hand, led to racemization. Incorporation of the methylated phenylalanines into position 2 of oxytocin led to, in the case of the D‐isomers, potent uterotonic inhibitors.