Iron-oxide (Fe 2 O 3 ) nanoparticles in the dimension of ∼2.3 nm supported on zeolite-Y appeared as an excellent, reusable heterogeneous catalyst for the chromatography-free selective synthesis of 2,2-di(3-indolyl)-3-indolones, a C2-trimerized product. The zeolite-Y-supported Fe-oxide nanocatalyst showed the catalytic activity better than the Pd-and Au-based catalysts in the synthesis of C2 di-indolyl indolones under the prevailing reaction conditions. Besides, this low-cost catalyst displayed the ability to synthesize the pharmaceutically significant isatin molecules with high selectivity. The nature of the solvent and oxidant played a crucial role in the regioselective trimerization of indoles. The selective formation of the C2-trimerized product was accomplished in acetonitrile with peroxymonosulfate (oxone) as the oxidant, while in a water/acetonitrile mixture, it led to the formation of isatin. Compared to many other high-cost catalysts, the cheaper zeolite-Y-supported iron oxide catalyst promoted the reaction at room temperature with high selectivity. The products were obtained within 15−30 min with ≤95% yield. Different pieces of spectroscopic and electrochemical evidence supported by density functional theory (DFT) studies provided strong evidence for the proposed reaction mechanism. The kinetics of the reaction was studied through UV−vis spectroscopy and found to follow first-order kinetics. The UV−vis spectrum of the C2-trimerized product was further evaluated through time-dependent DFT calculations. The CO 2temperature programmed desorption study indicated the presence of strong basic sites in the Fe 2 O 3 -Y catalyst, favoring the interaction of the acidic indole molecule with the catalyst surface.