The synthesis of an undocumented skeleton of 3-hydroxy-2, 3-dihydroisoquinoline-1, 4- diones has been discovered and reported. The reaction consists of an intramolecular cyclization of o-(1-alkynyl) benzamides in MeCN/H2O, mediated by metal-free, hypervalent reagent of PhI (OCOCF3) 2, followed by an oxidative hydroxylation reaction. The mechanism consisting of two pathways has been proposed and discussed.