Derieg and Stembach [1] reported a synthesis for benzo-condensed 4,5-dihydro-1,4-oxazepinone systems through the acylation of o-anilinomethylphenols by bromoacetyl bromide and subsequent intramolecular cyclization of the resultant 2-bromo-N-(2-hydroxybenzyl)acetanilides by the action of sodium hydride [1]. We have extended this method for the preparation of previously unreported substituted 4,5-dihydro[1,4]oxazepino[7,6-b]quinolin-3-ones. Substituted 3-aminomethyl-2-quinolones 1a-c are readily acylated by chloroacetyl chloride in a two-phase methylene chloride–water system in the presence of K2CO3 or KOH to give N-chloroacetyl derivatives 2a-c. The action of either sodium hydride in DMF at room temperature or of ethanolic alkali, which is a weaker base, at 50°C on 2a-c gives substituted 4,5-dihydro[1,4]oxazepino[7,6-b]quinolinones 3a-c: