In this study we have developed an efficient synthesis of 1,2-dihydroquinoline and dihydrobenzo[b]azepine derivatives involving the iron(III) chloride intramolecular alkyne–carbonyl metathesis reaction for the first time. Various functionalized 1,2-dihydroquinolines and dihydrobenzo[b]azepines were prepared from easily accessible substrates in the presence of environmentally friendly and inexpensive iron(III) chloride (10 mol%) under mild conditions. The method is applicable to a wide range of substrates containing different functional groups and furnishing products in good to excellent yields. This methodology was further extended to the one-pot synthesis of 3-acyl quinolines via alkyne–carbonyl metathesis/detosylation/aromatization of N-propargyl-2-aminobenzaldehyde/acetophenone derivatives by the addition of NaOH/EtOH. While many Lewis acid and Brønsted acid catalysts were investigated, anhydrous iron(III) chloride turned out to be the best catalyst for this transformation.