A simple and efficient protocol has been developed for the synthesis of 4-hydroxyindole fused isocoumarins from easily available starting materials. Dihydroxy-indenoindoles, the cyclic hemiaminals of the condensation products of ninhydrin and enamines of 1,3-cyclohexanedione, produced indole fused isocoumarins 11-(aryl/alkyl)-8,9,10,11-tetrahydro-6-oxa-11-aza-benzo[a]fluorine-5,7-diones through an acid catalyzed intramolecular rearrangement. The above isocoumarin derivatives furnished novel 4-hydroxyindole fused isocoumarins 11-(aryl or alkyl)-7-hydroxy-11H-6-oxa-11-aza-benzo[a]fluoren-5-ones through dehydrogenation with Pd/C. The synthesized 4-hydroxyindole fused isocoumarins show fluorescence properties with good quantum yields and fluorescence "Turn-off" sensing of Cu2+ and Fe3+ ions. Importantly these molecules are found to be chemosensors only for Cu2+ ions with respect to UV-Vis spectral change and naked eye colour change in the presence and absence of UV radiation. This journal is © The Royal Society of Chemistry 2015.