A new sensitive spectrophotometric method has recently been developed for the trace determination of cyanide with ninhydrin. Cyanide ion was supposed to act as a specific base catalyst. Nevertheless, this paper demonstrates that the reported assay is based on a novel reaction of cyanide with 2,2-dihydroxy-1,3-indanedione, which affords purple or blue colored salts of 2-cyano-1,2,3-trihydroxy-2H indene. Hydrindantin is merely an intermediary of the reaction. The formation of a stable and isolable ninhydrin-cyanide compound has been confirmed by its preparation in crystalline form. Also, it is thoroughly characterized by elemental as well as MS, IR, UV/VIS and 1 H NMR analyses. The Ruhemann's sequence of reactions of cyanide with ninhydrin has been reconsidered and an adequate mechanism of the reaction is proposed. As a consequence, the interference of oxidizers as well as copper, silver and mercury ions with the cyanide determination has been elucidated.