A new domino alkylation–cyclization–air-oxidation of 2-halo-1,3-dicarbonyl compounds with 2-aminophenols promoted by caesium salts under aerobic conditions has been developed. Unexpected alkyl 3-substituted-2-hydroxy-3,4-dihydro-2H-1,4-benzoxazine-2-carboxylates, rather than normal ethyl 3,4-dihydro-2H-1,4-benzoxazine-2-carboxylate, were exclusively obtained under mild conditions. A plausible mechanism for this unprecedented reaction is also given.