Thermal treatment of 1, 2-dihydroindol-3-ones (2) with allyl alcohols (3) in the presence of camphorsulfonic acid and magnesium sulfate advances a sequence of condensation and Claisen rearrangement to give 1, 2-dihydro-2-allylindol-3-ones (6) including 2-(1, 1-dimethylallyl) derivatives (1).