A new effective catalytic system consisting of [CpRhCl(2)](2)/K(2)CO(3) (Cp = pentamethylcyclopentadienyl) for the lactamization of amino alcohols has been developed. As an example, the reaction of 3-(2-aminophenyl)-1-propanol in the presence of [CpRhCl(2)](2) (5.0% Rh) and K(2)CO(3) (10%) in acetone gives 3,4-dihydro-2(1H)-quinolinone in an isolated yield of 80%. A variety of five-, six-, and seven-membered benzo-fused lactams are synthesized by this catalytic system. [reaction: see text]