A facile iodine/water‐mediated oxidation of the triple bond of o‐alkynylaroyl compounds to furnish tricarbonyl compounds is reported. The reaction proceeds through the formation of isochromenol intermediates by the assistance of the neighbouring aroyl group. The product tricarbonyl compounds are versatile synthetic precursors that, upon treatment with mono‐ and diamines, hydrazines and amino alcohols, afford various heterocyclic scaffolds such as isoindolinones, phthalazines, benzimidazoisoquinolinones, quinoxalines and benzimidazole‐quinoxaline hybrid compounds. Mechanistic aspects of the formation of the above heterocycles are discussed. Finally, a short synthetic route to the isoindolinone natural product, aristolactam BII is reported.