Direct α-alkylation of amides and the synthesis of C3-alkylated 3-hydroxyindolin-2-one/2-substituted-2-hydroxy-3,4-dihydronaphthalen-1(2 H )-one derivatives from 2-oxindole/1-teralone were reported using primary alcohols in the presence of Ru-NHC catalyst in a one pot condition under the borrowing hydrogen method. In the case of inert conditions, 2-oxindole/1-teralone exclusively forms the C3-alkylated product. Whereas, allowing this reaction mixture to occur under an air atmosphere predominantly forms C3-alkylated 3-hydroxyindolin-2-one via domino C–H alkylation and aerobic C–H hydroxylation. This Ru-NHC catalyst is easily accessible, air stable, and phosphine free. Using this method, synthesis of 2-oxindole based natural products such as Donaxaridine was accomplished.