A facile and efficient method was developed for the synthesis of 1,2,4,5-tetrahydro-1,4-benzodiazepine-3-ones from 2-chloro-N-(2-nitrobenzyl)acetamides through a reductive cyclization using iron-ammonium chloride in ethanol–water in good yields. This method provides a simple approach to these benzodiazepine-3-ones which are of high value in the field of medicinal chemistry research.