A novel formaldehyde-mediated condensation reaction of N,N-dialkyl aromatic amines and resonance-stabilized carbon nucleophiles is described. A condensation reaction between N,N-dimethylaniline (4) and ethyl acetoacetate (8) in the presence of formaldehyde in acetic acid took place to give 2-(4-dimethylaminobenzyl)-3-oxo butyric acid ethyl ester (9) together with the dimerization product 7 in 73 and