The alcohol first attacks CDI, forming an activated O-carbonylimidazole derivative. Its departure gives the resonance-stabilized propargyl/allenyl cationThe ortho amino nitrogen attacks the central carbon of the allenyl system, closing the five-membered indole ring. Electron redistribution and loss of the N-H proton establish the indole aromatic system while leaving a carbene at the original distal, phenyl-bearing alkyne carbon.
For atom tracking, the original carbinol carbon becomes indole C3, the proximal alkyne carbon becomes C2, and the distal becomes the exocyclic carbene. Attack at the distal alkyne carbon would make a six-membered ring and cannot give the displayed skeleton. This carbene-based rearrangement has a primary experimental precedent.[ref]
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