A new strategy for the construction of phenanthridine and isoquinoline scaffolds, starting from arenes containing a pending isocyanide moiety under palladium catalysis, has been developed. This process involves sequential intermolecular isocyanide insertion to an aryl palladium(II) intermediate and intramolecular aromatic C-H activation as key steps. Alkyl palladium(II) intermediate lacking β-hydrogen is also applicable to this reaction, generating unique bisheterocyclic scaffolds with three C-C bonds being formed consecutively.