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An oxidative annulation of 2-arylidene-1,3-indanediones with Meldrum’s acid has been developed for the divergent syntheses of spirolactones with a spiro center located at the γ-position with respect to the carbonyl group. This heteroannulation protocol tolerates various functional groups and delivers moderate-to-good product yields. Interestingly, the reaction outcomes are exclusively controlled by the reaction oxidant/medium. This annulation strategy can also be executed in the flow system with decent product yields. Control experiments revealed that the reaction proceeds via a radical tandem annulation pathway.