A novel and efficient Rh-catalyzed carbonylation and annulation of simple anilines with CO and alkynes through N-H and C-H bond activation for the direct synthesis of quinolin-2(1H)-ones has been developed. Simple anilines without preactivation, broad substrate scope with hetero/polycycles, and high-value products make this protocol very practical and attractive. A key rhodacycle complex was isolated and well-characterized.