4-Amino-2-methylbenzofurans are quantitatively converted to 4-hydroxy-
2-methylindoles in acidic medium. The rearrangement mechanism involves
the ring opening of the furan ring to produce an intermediate carboca
tion, which undergoes ring closure to the indole system. Isomerization
takes place only in the presence of a methyl substituent in 2 positio
n.