Model studies dealing with the rhodium(II)-catalyzed carbenoid insertion/cyclization/cycloaddition cascade of several α-diazo dihydroindolinones have been carried out as an approach to the alkaloid mersicarpine. The cascade reaction of α-diazo dihydroindolinone 21 proceeded in high yield with excellent diastereoselectivity to give cycloadduct 22, which possesses the required stereochemistry of the two adjacent quaternary carbon centers present in mersicarpine. The overall reaction enabled the rapid assemblage of a polycyclic ring system that contains three new stereocenters and three continuous quaternary carbons in a single operation in high yield with excellent diastereoselectivity. The 3-indolinone derivative 36 was eventually formed from cycloadduct 22 by an acid-induced hydrolysis of 22 to give 23, which was subsequently converted in several steps to 36. The synthesis of this compound constitutes a successful construction of the tricyclic core of mersicarpine. Reduction of the nitrile group of 36 followed by a subsequent reductive cyclization/ring-opening aromatization cascade, as was found to occur with the related compound 29, will be employed for an eventual synthesis of demethylmersicarpine.