An iodine‐catalyzed C3‐arylation of indoles with cyclohexanones to selectively synthesize 2‐(indol‐3‐yl)phenols has been described. Mechanism studies indicate that the oxygen atom in 2‐(indol‐3‐yl)phenols is originally from DMSO. This cascade involving dehydration condensation, selective oxygenation, dehydrogenation, and aromatization was achieved in one pot under transition‐metal‐free conditions.