An economical new process has been developed for the synthesis of donepezil hydrochloride (1) an anti-Alzheimer's drug. The process involves Darzen reaction of pyridine- 4-carboxaldehyde and 2-bromo-5, 6-dimethoxy indanone affording epoxide 5, 6-dimethoxy- 3-(pyridine-4-yl) spiro [indene-2, 2′-oxiran]-1 (3H)-one (4) as a key intermediate. The one- pot deoxygenation of 4 and hydrogenation of the aryl moiety in high yield improved the ...