Synthesis of highly functionalized spiro[4.4]nonane, and spiro[4.5]decane motifs by the reaction of dimethylacetylenedicarboxylate (DMAD) with 2‐(2'‐ketoalkyl)‐1,3‐indandiones, 2‐(3'‐ketoalkyl)‐1,3‐indandiones, respectively, has been developed by utilizing a catalytic amount of DABCO. The tertiary hydroxy‐containing spiro[4.4]nonane products were converted into fully conjugated pentafulvene π‐systems in an acidic medium via dehydration and unprecedented C‐C bond rearrangement.