Herein, we report a novel and unexpected metal-free oxygenation of 2,3-diphenyl-1-indenones, under an oxygen atmosphere (air), to either 2,3-epoxy-2,3-diphenyl-1-indenone or 2-hydroxy-2,3-diphenyl-1-indanone, depending on the conditions. Several bioactive epoxy indenones and one-pot α-hydroxy indanones (α-acyloin) were synthesized from 2,3-diaryl dihydroindanone and 2,3-diarylindenone, respectively. A plausible reaction mechanism is also proposed, where oxygenation would take place at the α-position and further proton abstraction from the β-position leads to epoxy indenone derivatives. A one-pot cis-hydroxy indanone protocol is also achieved directly from biaryl indenone via reduction, epimerization, and oxygenation. The synthesized compounds were evaluated for inhibitory activity against the DNA repair protein AlkB. Among the screened (17 tested) compounds, one epoxide derivative was found to be a specific inhibitor of AlkB enzyme function.