Rh(III)-Catalyzed C–C/C–O bond formation between cyclic 2-diazo-1,3-diketones and salicylamides with additive-controlled chemoselectivity is described. The reaction proceeded under mild reaction conditions and exhibited good functional group tolerance and scalability. 3,4-Dihydrodibenzo[b,d]furan-1(2H)-ones were obtained in moderate to excellent yields (55–90%) through a tandem N–H activation/C–C cleavage/etherification process when AgNTf₂ was used as the additive, whereas utilizing Cu(OAc)₂ afforded isocoumarins in good yields (60–86%) via a C–H activation/C–N cleavage/lactonization pathway.