An I2-promoted domino bicyclization approach via multiple sequential C-H functionalization was serendipitously discovered for the synthesis of 1,2-fused oxindoles from methyl ketones and anilines. This approach was optimized, resulting in a concise and atom-economical approach for the one-pot construction of 1,2-fused oxindoles from methyl ketones and anilines rather than using preexisting indolin-3-ones or indoles. Mechanistic studies revealed that the key step involved an oxidative cross-coupling between in situ generated phenylglyoxal and α,α-diaminoketone.