An unprecedented base-controlled selective skeletal rearrangement reaction of hexahydro-4H-indol-4-ones has been developed. In this protocol, highly functionalized dihydroxy-4H-cyclopenta[b]pyridin-4-ones and 8-alkenyl oxepane-2,6-diones were prepared with a broad substrate scope and high chemoselectivity in moderate to excellent yields selectively by modulating LiOH and Et3N. In addition, the newly formed 8-alkenyl oxepane-2,6-dione scaffolds could be easily further derivatized to 5-(pyrrol-2-yl)dihydrofuran-2(3H)-ones through a rare intramolecular rearrangement reaction.