A simple, efficient, and straightforward protocol has been developed for the synthesis of spiro‐oxindole fused dihydroquinazolinone derivatives from one‐pot three‐component reactions of isatoic anhydride, various primary anilines, and substituted isatins using a catalytic amount of sulfamic acid as an organocatalyst in water under refluxed conditions. All the synthesized compounds were formed within just 2 h and isolated pure by simple filtration with excellent yields (89%–94%). Gram scale production, use of commercially available low‐cost organocatalyst, green solvent, reusability of the medium, one‐pot three‐component reaction strategy, no column chromatography, and high atom economy are some of the major benefits of this newly developed protocol.