Chiral morpholinone is an important building block in organic synthesis and a pharmacophore in medicinal chemistry. However, catalytic enantioselective methods for the construction of this N,O-heterocycle remain scarce. We report herein a chiral phosphoric acid-catalyzed enantioselective synthesis of C3-substituted morpholinones from aryl/alkylglyoxals and 2- (arylamino)ethan-1-ols. The reaction proceeds through a domino [4 + 2] heteroannulation followed by a 1,2-aryl/alkyl shift of the resulting cyclic α-iminium hemiacetals. It represents formally an unprecedented asymmetric aza-benzilic ester rearrangement reaction. A concise synthesis of L-742,694, a neurokinin-1 receptor antagonist, featuring this reaction is documented.