A divergent method for ring expansion and ring opening of 3-halooxindoles has been developed. Under mild base-mediated conditions, 3-halooxindoles generate indolones in situ, which then react smoothly with N-alkoxycarbonyl-O-tosylhydroxylamines to give 4-aminoquinolin-2-ones and N-Cbz-N′-arylureas in good to excellent yields via ring expansion and opening pathways, respectively. This protocol is characterized by easy availability of substrates, user-friendly reaction conditions, broad functional group tolerance, and a simple operation procedure.