Rh(iii)-catalyzed coupling of phenylhydrazines with 1-alkynylcyclobutanols was realized through a hydrazine-directed C-H functionalization pathway. This [4+1] annulation, based on the cleavage of a Csp-Csp triple bond in alkynylcyclobutanol, provides a new pathway to prepare diverse 1H-indazoles under mild reaction conditions.