An unexpected isomerization of azomethine ylides generated in situ from isatin with indoline-2-carboxylic acid has been disclosed, providing direct access to N-functionalized indole scaffolds. This protocol has good functional group tolerance and provides various 3-(1H-indol-1-yl)indolin-2-one derivatives in moderate to high yields simply by using alcohol as the solvent, with no additional additive being required.