An efficient protocol for the chemoselective construction of the indeno[1,2-b]pyrroles and rearranged indeno[1,2-b]pyrrole derivatives is reported via an N-acylation/cyclization/Wittig reaction. Extensive mechanistic investigations revealed that the initially formed crucial spiro-indene-1,2'-[1,3,4]oxadiazol intermediate further reacts with phosphine to generate betaine, thus predominately resulting in the aforementioned heteroarenes proceeding by a Wittig reaction.