Functionalized isocyanide chemistry represents an important research area in organic synthesis. A structurally unique 2‐isocyanophenl propargylic ester has been designed to incorporate the reactivity of isocyanide and propargylic ester. Thus, the reaction of 2‐isocyanophenyl propargylic ester and 2‐aminoaromatic aldimine facilitates the synthesis of a wide range of polycyclic benzo[b]indolo[3,2‐h][1,6]naphthyridine derivatives. Furthermore, reacting with 2‐hydroxyaromatic aldimine enables the divergent synthesis of both the aforementioned scaffolds and another structurally distinctive diazabenzo[f]naphtho[2,3,4‐ij]azulenes featuring a [7‐6‐5] core skeleton. Experimental results and DFT calculations suggest that these transformations likely proceed via the in situ generation of a strained cyclopropen‐imine species followed by [3+2] cycloaddition. Next, switchable nucleophilic attack/ring‐expansion/aromatization and nucleophilic addition/ring‐expansion/elimination account for the observed selectivity.