A Lewis acid catalyzed C-3 alkylidenecylopentenylation of indoles through the ring opening of pentafulvene derived diazabicyclic olefins has been developed. The present protocol offers an efficient route toward the synthesis of indole and bisindole derivatives. The role of the hydrazine group, as a reaction carrier in the strategy has also been demonstrated by the stepwise synthesis of functionalized bisindole.