Efficient palladium catalyzed aerobic oxidative cyclization of ortho-vinylanilines with isocyanides have been achieved for the synthesis of 2-aminoquinolines in good to excellent yield. Characteristic features of the method are tolerance to various functional groups, use of catalytic amount of [Pd]/base and O2, the most sustainable oxidant, gram scale synthesis and high step and atom efficiency. Control experiments suggested the formation of carbodiimide followed by electrocyclization and [1, 7]-H shift as possible pathway. Utility of the developed method was further demonstrated through synthesis of anti-depressant agent. © 2016 Printed in India.