An unexpected cascade reaction of 2-nitrochalcones with isocyanoacetates has been reported for the efficient synthesis of indole carboxylic esters and pyranoindoles. The conversion was achieved by KOH-catalyzed cyclization and elimination of the nitro group with final decarbonylation-aromatization. The method was used to synthesize a series of potentially biologically active indole derivatives (49 examples) in 67-85% yields under transition-metal-free catalytic conditions.