A series of 15 benzene-fused hexahydropyrrolo[1,2-b]isoquinolonic acids with substantial degree of steric encumbrance has been prepared via a novel variant of the Castagnoli-Cushman reaction of homophthalic anhydride (HPA) and various indolenines. The employment of a special kind of a cyclic imine component reaction allowed, for the first time, isolating a Mannich-type adduct between HPA and an imine component which has been postulated but never obtained in similar reactions.