A Rh(III)-catalyzed synthesis of isoquinolinones and pyridinones bearing a methylene motif is presented. This protocol using easily accessible 1-cyclopropyl-1-nitrosourea as the precursor of propadiene features simple and practical manipulation and tolerates a broad spectrum of functional groups, including strong coordinating N-containing heterocyclic substituents. Late stage diversification and the rich reactivity of methylene for further derivations demonstrate the value of this work.