A Pd(II)-catalyzed reaction protocol for the carboxylation of ortho-C-H bonds in anilides to form N-acyl anthranilic acids has been developed. This reaction procedure provides a novel and efficient strategy for the rapid assembly of biologically and pharmaceutically significant molecules, such as benzoxazinones and quinazolinones, from simple anilides without installing and removing an external directing group. The reaction conditions are also amenable to the carboxylation of N-phenyl pyrrolidinones. A monomeric palladacycle containing p-toluenesulfonate as an anionic ligand has been characterized by X-ray crystallography, and the crucial role of p-toluenesulfonic acid in the activation of C-H bonds in the presence of carbon monoxide is discussed. Identification of two key intermediates, a mixed anhydride and benzoxazinone formed by reductive elimination from organometallic Ar(CO)Pd(II)-OTs species, provides mechanistic evidence for a dual-reaction pathway.