A novel and efficient domino process has been developed for the synthesis of 1,4‐benzoxazepine derivatives from a range of readily accessible N‐tosylaziridines, 2‐iodophenols and isocyanides. This process involves the aziridine ring‐opening reaction with 2‐iodophenol, followed by a palladium‐catalyzed isocyanide‐insertion reaction. This regioselective and high‐yielding transformation could be extended to its application for the synthesis of natural products and biologically interesting heterocycles.