An unprecedented C-H alkylation using α,β-unsaturated γ-lactones (butenolides) and dihydrofurans was achieved by the Rh-catalyzed reaction of benzamides. C-C bond formation occurs between the ortho-position of the benzamide derivative and the γ-position of the butenolide or the α-position of the dihydrofuran. The presence of an 8-aminoquinoline directing group is crucial for the success of the reaction. The results of deuterium labeling experiments indicate that the cleavage of the C-H bond is reversible and suggest that a migratory carbene insertion is involved as the key step.