The first chemoselective C4‐benzylation of 5‐aminopyrazoles, utilizing a 3 mol% squaric acid catalyst, is disclosed. In this process, ortho‐quinone methides are efficiently generated from 2‐hydroxybenzyl alcohols in water under mild conditions. This method successfully delivers a wide range of C4‐benzylated 5‐aminopyrazoles, achieving moderate to excellent yields while demonstrating high chemoselectivity, which is further confirmed by mechanistic studies. Notably, the protocol uses water as an eco‐friendly solvent, requires a low organocatalyst loading, and eliminates the need for column chromatography.