The piperidine promoted three‐component reaction of N‐alkylpiperidin‐4‐ones, malononitrile and 2‐arylidene‐1,3‐indanediones in ethanol selectively resulted in the spiro[indene‐2,7′‐isoquinoline] and the ring‐opened cis‐ or trans‐1,2,8,8a‐tetrahydroisoquinoline derivatives at room temperature or at the elevated temperature. However, the four‐component reaction N‐alkylpiperidin‐4‐ones, malononitrile, aromatic aldehydes and 1,3‐indanedione in refluxing ethanol mainly afforded ring‐opened cis‐1,2,8,8a‐tetrahydroisoquinoline derivatives in good yields and with high diastereoselectivity. A plausible domino reaction mechanism was proposed for the formation of the different polycyclic products.