An efficient and mild protocol for the direct construction of aryl- and alkyl-substituted isoquinolines has been realized through silver nitrate catalyzed aromatic annulation of o-(1-alkynyl)arylaldehydes and ketones with ammonium acetate. The salient feature of this methodology is that this annulation could be effected at room temperature leading to a wide range of isoquinoline derivatives in good to excellent yields. Additionally, this approach has been employed to the synthesis of biologically important isoquinoline alkaloids such as berberine and palmatine.