In this paper, an efficient synthesis of N-arylindoles through the cascade reaction of 2-alkenylanilines with diazonaphthalen-2(1H)-ones is presented. Mechanistically, this reaction involves the generation of a Ru−carbene complex from diazonaphthalen-2(1H)-one, followed by carbene N−H bond insertion with 2alkenylaniline, intramolecular cyclization, and oxidative aromatization. In this reaction, the Ru(II) complex acts as a multifunctional catalyst to promote not only the carbene formation but also the intramolecular cyclization and the dehydrogenative aromatization. Meanwhile, air acts as a green and cost-effective oxidant. To our knowledge, this is the first example in which N-arylindoles were synthesized through simultaneous introduction of the N-aryl unit and construction of the indole scaffold. Notable advantages of this method include readily accessible and halide-free substrates, additive-free reaction conditions, good efficiency, excellent atom economy, and compatibility with diverse functional groups. In addition, the utility of the product thus obtained was showcased by its diverse structural transformations.