Indole and its derivatives undergo smooth conjugate addition onto en-1,4-dione derived from isatin and acetophenone, in the presence of a catalytic amount of molecular iodine in acetonitrile under mild conditions to afford a novel class of 3-(1-(1H-indol-3-yl)-2-oxo-2-phenylethyl)indolin-2-one derivatives in good yields with high degree of 1,4-selectivity. Some of these compounds are found to exhibit modest antibacterial and antifungal properties.