Described herein is an unusual Cp*CyRh(III)-catalyzed intramolecular site-specific aryl C-H annulation, a highly chemoselective protocol providing direct access to eight-membered sultams/lactams with broad substrate/functional group tolerance. Experimental and computational studies reveal that such a transformation involves a unique PivOH-assisted aryl C-H activation/alkene insertion/β-H elimination/hydrogen-transfer process involving the Rh(III)-hydride species as the active intermediate with the concomitant release of H2 as the major byproduct, thus enabling the developed Cp*CyRh(III) catalysis with redox-neutral and highly atom-economical features.