We report herein the first use of N-chloroimines as effective synthons for directed C-H functionalization. Rh(III)-catalyzed coupling of N-chloroimines with α-diazo-α-phosphonoacetates allows for efficient dechlorinative/dephosphonative access to 2H-isoindoles. Further deesterification under Ni(II) catalysis enables the complete elimination of reactivity-assisting groups and full exposure of reactivity of C3 and N2 ring atoms for attaching structurally distinct appendages.