Mechanistic understanding of asymmetric induction plays a crucial role in designing new catalytic asymmetric reactions. Reported herein is atroposelective access to C–N axially chiral isoquinolones via rhodium-catalyzed C–H activation of N-alkoxy benzamides and annulation with imidoyl sulfoxonium ylides. The coupling system proceeded with excellent functional group tolerance, and different conditions were identified to afford one or the other enantiomeric product each in excellent enantioselectivity for a representative class of the sulfoxonium ylide reagent, thus making both enantiomers readily available using the same catalyst. Experimental and computational studies revealed a pathway of C–H alkylation and enantio-determining formal nucleophilic substitution-C–N cyclization that is mediated by the rhodium catalyst via σ-bond metathesis as the asymmetric induction mechanism. Computational studies indicated that the solvent-dependent enatiodivergence originated from different levels of σ-bond metathesis mediated by neutral versus cationic rhodium species.