A novel approach for the synthesis of the C1 and C3‐dialkoxy indoles has been developed for using 2‐(phenylethynyl)aniline with formaldehyde and alcohols under the catalysis of acid and palladium acetate. This multicomponent reaction that provides a straightforward alkoxymethylation process to construct substituted indoles is expected to be an important method for the synthesis of indole derivatives.