An unprecedented reactivity of 3-aminoquinoline-2,4-diones is reported. Under basic conditions, these compounds undergo molecular rearrangement to furnish 1,4-benzodiazepine-2,5-diones. The transformations take place under mild reaction conditions by using 1,1,3,3-tetramethylguanidine, NaOEt, or benzyltrimethylammonium hydroxide as a base. A proposed mechanism of the rearrangement and the conformational equilibrium of 1,4-benzodiazepine-2,5-dione rings are discussed.