Rh(III)-catalyzed tandem C-H allylation and oxidative cyclization of anilides with allyl carbonates in the presence of a slight excess of AgSbF6 salt and Cu(OAc)2 as oxidant affords easy, economical access to important bioactive 2-methylindoles. The new reaction supports a wide range of functional groups on the anilide substrate. A possible mechanism is proposed as a basis for its rational further development.