We report a Rh(III)-catalyzed ortho-C-H bond functionalization of nitroarenes with 1,2-diarylalkynes and carboxylic anhydrides. The reaction unpredictably affords 3,3-disubstituted oxindoles with the formal reduction of the nitro group under redox-neutral conditions. Besides good functional group tolerance, this transformation allows the preparation of oxindoles with a quaternary carbon stereocenter using nonsymmetrical 1,2-diarylalkynes. This protocol is facilitated by the use of a functionalized cyclopentadienyl (Cp(TMP)*)Rh(III) [Cp(TMP)* = 1-(3,4,5-trimethoxyphenyl)-2,3,4,5-tetramethylcyclopentadienyl] catalyst we developed, which combines an electron-rich character with an elliptical shape. Mechanistic investigations, including the isolation of three rhodacyle intermediates and extensive density functional theory calculations, indicate that the reaction proceeds through nitrosoarene intermediates via a cascade of C-H bond activation─O-atom transfer─[1,2]-aryl shift─deoxygenation─N-acylation.