A very unusual high yield of rearranged products (via methyl migration) has been obtained in the Fischer indole cyclization of the 3-(2, 5-dimethyl phenylhydrazone) of 2, 3-piperidine dione (6b). When a less activated aromatic ring is present in the phenylhydrazone 6, such a behaviour is not observed and cyclization occurs essentially without rearrangement.