A novel tandem oxidative Ritter reaction/hydration/aldol condensation of α-arylketones with substituted propiolonitriles has been developed. This protocol conveniently affords a wide range of functionalized 3-acyl-3-pyrrolin-2-ones through the efficient construction of four chemical bonds, a C-N bond, a C═C bond, and two C═O bonds, and the formation of one ring bearing an aza-quaternary center, which is ascribed to the strategical introduction of functionalized nitriles to this transformation. A reaction mechanism was proposed based on some control experiments.