The Rh-catalyzed direct annulation of an aldehyde with an alkyne leading to indenone was achieved. The in situ temporal installation of acetylhydrazine enables the annulation of the ortho arene C-H bond with alkynes to form ketone hydrazone. Subsequently, the in situ directing group removal takes place since ketone hydrazone is more susceptible toward hydrolysis than aldehyde hydrazone. Notably, this procedure tolerates a series of functional groups, such as methoxyl, acetylamino, fluoro, trifluoromethyl, methoxycarbonyl, chloro, and bromo groups.