Thermolysis of 2-(N-acylamino)benzyl methyl ethers, in the presence of an acid catalyst and triphenylphosphine, or 2-(N-acylamino)benzylphosphonium salts is found to serve as a novel method for indole formation, in particular for the synthesis of 2-trifluoromethylindoles. The reaction of the benzyl methyl ethers is suggested to involve a phosphonium intermediate, which thermally decomposes to the indoles.