Series of 3,4-dihydro-2(1H)-quinolinone derivatives having sigma-1 receptor (σ1R) antagonist activity have been synthesized. 3,4-dihydro-2((1)H)-quinolinones have been synthesized using N-(1′-alkoxy)cyclopropyl-2-haloanilines as starting reagent. Cyclopropane ring expansion in the presence of palladium catalyst is the major step involved in the synthesis. Library of 3,4-dihydro-2(1H)-quinolinones have been synthesized through the rearrangement of β-lactam intermediates on the solid-phase