The illustrated azomethine ylide, produced through a Schiff base condensation of the corresponding aldehyde-containing C3a-arylhexahydroindole with ethyl l-leucinate, engages in a stereoselective intramolecular cycloaddition reaction to give adduct 23 that has been elaborated, over eight steps, into the racemic modification of the alkaloid derivative gracilamine (1). The formation of this ylide and its conversion into isomer 23 mimics the proposed biogenesis of the pentacyclic framework of compound 1.