An efficient Rh(III)-catalyzed synthesis of 2-arylindole derivatives via intermolecular C–H annulation of arylhydrazines with sulfoxonium ylides was accomplished. A variety of 2-acetyl-1-arylhydrazines with sulfoxonium ylides were converted into 2-arylindoles in satisfactory yields. Excellent selectivity and good functional group tolerance of this transformation were also observed.