We disclosed a regio-selective C-H and N-H bond functionalization of indolines using alcohols in water via tandem dehydrogenation of N-heterocycles and alcohols. A diverse range of N- and C3-alkylated indolines/indoles were accessed utilizing a new cooperative iridium catalyst. The practical applicability of this methodology was demonstrated by the preparative-scale synthesis and synthesis of a psychoactive drug, N,N-dimethyltryptamine. A catalytic cycle is proposed based on several kinetic experiments, series of control experiments and density functional theory calculations.