One-pot and efficient syntheses of structurally diverse isoquinolin-3-ones and isoquinolin-3-one-based benzo-1,4-diazepin-2,5-diones have been developed. The notable features of the process include the Ugi condensation of monomasked phthalaldehydes with amines, carboxylic acids, and isonitriles, followed by HClO4-mediated intramolecular condensation of the carbonyl with amide.