Silver trifluoroacetate with dual functions is demonstrated for constructing phthalic anhydride in air via palladium-catalyzed oxidative carbonylative [4 + 1] annulation of aromatic acids. Mechanistic studies reveal that the reaction occurs through the sequential reactions of carboxyl-assisted C–H bond activation, insertion of the in situ released CO from silver trifluoroacetate and reductive elimination. Silver trifluoroacetate serves as both a convenient in situ CO source and an oxidant in the reaction. This protocol features quite simple reaction conditions and simple operation, without the need for gaseous CO, additives, ligands and additional CO sources or oxidants. Notably, silver trifluoroacetate is disclosed as an unprecedented gaseous CO surrogate in carbonylation reactions, and high purity silver can be recovered readily after the reaction.