A new palladium(II) catalyzed methodology for the direct synthesis of alkylidene isoindolinones from Al-alkoxybenzamides is presented. Isoindolinone formation proceeds through a highly efficient and E-selective C-H activation/Heck/Aza-Wacker sequence. Substoichiometric amounts of benzoquinone can be employed in a cooperative oxidation system with O-2, leading to facile purification of products. Modification of the reaction conditions provides a general route to substituted phthalimides by carbonylation with CO. Both systems were found to tolerate a wide range of functionality.