We have developed catalyst-controlled regiodivergent rearrangements of onium-ylides derived from indole substrates. Oxonium ylides formed in situ from substituted indoles selectively undergo [2,3]- and [1,2]-rearrangements in the presence of a rhodium and a copper catalyst, respectively. The combined experimental and density functional theory (DFT) computational studies indicate divergent mechanistic pathways involving a metal-free ylide in the rhodium catalyzed reaction favoring [2,3]-rearrangement, and a metal-coordinated ion-pair in the copper catalyzed [1,2]-rearrangement that recombines in the solvent-cage. The application of our methodology was demonstrated in the first total synthesis of the indole alkaloid (±)-sorazolon B, which enabled the stereochemical reassignment of the natural product. Further functional group transformations of the rearrangement products to generate valuable synthetic intermediates were also demonstrated.