A novel method to synthesize isoquinolones via oxidative annulation of N-alkoxy benzamides and alkynes using binaphthyl-stabilized palladium nanoparticles (Pd-BNP) as catalyst has been developed. This methodology affords various isoquinolone derivatives in good to excellent yields with high regioselectivities in the presence of air as oxidant. N-Methoxybenzothioamide was also found to undergo oxidative annulation with alkyne successfully and provided a sulfur analogue of isoquinolones in moderate yields. The Pd-BNP catalyst was easily recovered and reused up to four times without any apparent agglomeration. (Figure presented.). © 2017 Wiley-VCH Verlag GmbH & Co. KGaA, Weinheim