A palladium-catalyzed imidoylative cycloamidation of N-alkyl-2-isocyanobenzamides with 2,6-disubstituted aryl iodides, affording unprecedented axially chiral 2-arylquinazolinones, has been developed with good yields and atroposelectivities. In this coupling-cyclization process, the biaryl linkage and the heteroaromatic ring are formed sequentially in one step. When N-(2,4-dimethoxyphenyl)-2-isocyanobenzamide is applied as a substrate, 2,3-diarylquinazolinones containing two stereogenic axes are produced with moderate diastereoselectivity and good enantioselectivities.