The three-component reaction of indole, isobutyraldehyde, and methyl acetoacetate affords methyl 2-(acetyl)-3-(1H-indol-3-yl)-4-methylpentanoate as a single diastereomer. To investigate the origin of the observed diastereoselectivity, the thermodynamics and kinetics of interconversion of diastereomers 1 and 2 in solution were studied by a combination of (1)H nuclear magnetic resonance (NMR) spectroscopy, high-performance liquid chromatography (HPLC), mass spectrometry, and deuteration experiments. The results indicate that interconversion is both acid- and base-catalyzed, and that the alpha carbon is the only stereolabile center in the molecule. The evidence points to an enolization mechanism for the interconversion process. The selective precipitation of 1 in the presence of the equilibrium 1⇆2 eventually results in the exclusive formation of 1 (crystallization-induced asymmetric transformation).