Iron(III)chloride catalyzes the aerobic oxidation of tertiary anilines, including tetrahydroisoquinolines, to form reactive iminium ion intermediates that undergo Mannich reactions with silyloxyfurans, nitroalkanes, and other nucleophiles to give the corresponding butenolides, nitro compounds, and alpha-substituted tetrahydroisoquinolines, respectively, in good to excellent yields.