Treatment of rebeccamycin (I) with p-toluenesulfonyl chloride and K2CO3 in refluxing THF yielded the 2'-tosylate (II). Further reaction of (II) with sodium azide in DMF at 70 C produced a 3:1 mixture of the cyclization product (III) and the azide (IV), which were separated by chromatography. Hydrogenolysis of (III) using ammonium formate and Pd/C in methanol provided the target dechlorinated compound.