5-Aryl-3-(3-indolylmethylene)-2(3H)-furanones (6a–c) were prepared as a mixture of (E) and (Z) stereoisomers by condensing indole-3-carboxaldehyde with 3-aroylpropanoic acids using thionyl chloride in N,N-dimethylformamide as cyclodehydrating agent. The reaction of the furanones 6a and 6b with anhydrous aluminium chloride in benzene, toluene or anisole led to the formation of 4,4-diaryl-1-(3-indolyl)buta-1,3-diene-2-carboxylic acids (7) as mixtures of geometrical (E, E- and E, Z-) stereoisomers via an intermolecular alkylation mode. The furanone 6c under the same reaction conditions gave 1-(4-methoxyphenyl)carbazole-3-carboxylic acid (8) via intramolecular alkylation. This represents a novel method for the synthesis of carbazole derivatives.