Quantum chemical calculations of ground state energy, geometrical structure and vibrational wavenumbers of 1-acetylindole has been carried out using density functional (DFT/B3LYP) method. Regioselective acylations of 1-acetylindole (N-acetylindole) under Friedel-Crafts reaction has been reported. Reaction of 1-acetylindole with manganese(III) acetate in the presence of malonic acid, is reported to afford 4-acetyl-3,3a,4,8b-tetrahydro-2H-furo[3,2-b]indol-2-one.