2-Hydroxy-2,2′-biindan-1,1′,3,3′-tetrone 1 upon stirring with moderately activated and deactivated arenes in superacidic triflic acid (CF3SO3H, TfOH) medium produces arylated adducts 2-aryl-2,2′-biindan-1,1′,3,3′-tetrones 3 within 1-2 h. Prolonged stirring (12-24 h) of the same reaction mixture gives rearranged products 3-(aryl-1,3-indanedionylmethylene)isobenzofuranones 4 involving three types of regioselectivity. The arylated adducts 3 and rearranged products 4 undergo nucleophilic ring opening and condensation with hydrazine hydrate to produce 4-substituted mono- and diphthalazinones depending upon the reaction temperature.