A novel iodine promoted cyclization of enaminone with aryl methyl ketones has been developed as a straightforward method for constructing 2-hydroxy-pyrrol-3(2H)-ones. This strategy affords structurally diverse 2-hydroxy-pyrrol-3(2H)-ones rings in high yields. Moreover, a quarternary alcohol has been constructed efficiently in the reaction. Product purification required only washing with CH2Cl2 solvent, thereby avoiding traditional chromatography and recrystallization, making this an example of group-assisted purification chemistry.