Iron trichloride promotes the cationic cyclization of o-(arylethynyl)aryl isocyanates leading to 3-(arylchloromethylene)oxindoles which can be stereoselectively converted to (Z)-3-(aminomethylene)oxindoles under straightforward conditions. When the alkyne is substituted by an alkyl group, activation of the allylic C-H bond also occurs producing 1,2-(dichloroalkylidene)oxindoles.