A novel one-pot tandem reaction of indole and β-carbonyl nitrile to generate dicarbonyl indoles has been developed. This tandem process involves α-oxonation of the β-carbonyl nitrile to afford α,β-dicarbonyl nitrile, Friedel–Crafts reaction with indoles and subsequent retro-cyanohydrination of cyano tertiary alcohol form dicarbonyl indoles.