The sulfa-Michael/aldol cascade reaction of 5-arylmethylidene-1-phenyl-6,7-dihydro-1H-indazol-4(5H)-ones and 1,4-dithiane-2,5-diol yielded novel 2′-(4-aryl)-4′-hydroxy-1-phenyl-4′,5′,6,7-tetrahydro-2′H-spiro[indazole-5,3′-thiophen]-4(1H)-ones in moderate yields. The structures of all the products were characterised thoroughly by NMR, IR and HRMS, together with X-ray crystallographic analysis.