A four-component reaction for the synthesis of 1,2-dihydroisoquinoline derivatives is described. The Huisgen 1,4-dipolar intermediate, which is produced from isoquinoline and an electron-deficient acetylene compound 1, reacts with H2O in the presence of diketene to produce 1,2-dihydroisoquinoline derivatives 2 (Scheme 1). In addition, reaction of isoquinoline, dibenzoylacetylene (= 1,4-diphenylbut-2-yne-1,4-dione), and diketene in the presence of H2O leads to pyrroloisoquinoline derivative 7 The structures of the compounds 2a - f and 7 were corroborated spectroscopically (IR, H-1- and C-13-NMR, EI-MS) and by elemental analyses. A plausible mechanism for the reaction is proposed (Schemes 2 and 3).