Iminiodichloromethanides generated by the reaction of O-acylsalicylaldehyde anils with dichlorocarbene undergo regioselective intramolecular 1,3-dipolar cycloaddition to the ester carbonyl group to give 2,5-epoxy-2,3,4,5-tetrahydro- 1,4-benzoxazepin-2-ones. These compounds are expedient precursors for the synthesis of N-(2-hydroxybenzyl)ethanolamines.