Rh-catalyzed intramolecular condensation of the benzyl azides with α-aryldiazoesters was explored. The reaction proceeded through the nucleophilic attack of the organic azide onto a rhodium carbenoid, while releasing nitrogen gas, affording the α-imino esters as the primary product. Tautomerization of the imino esters efficiently gave 13 desired isoindoles with good to excellent yields.