A facile one-pot cascade synthesis involving simultaneous in situ pyrazole formation followed by iodine/DMSO-mediated oxidation has been established to afford 1-aryl-2-(3-aryl)-1H-pyrazol-5-yl-ethane-1,2-diones. Primarily, a two-pot approach has been established which includes the reaction of 3-methylthio-1,5-diaryl-2-pentene-1,5-diones with hydrazine in the first step to afford pyrazole, which was eventually oxidized in the next steps in the presence of iodine in DMSO. Furthermore, we performed both steps in the same pot to afford 1,2-dicarbonyl compounds in good yield. The structure of one of the compounds was confirmed by single crystal X-ray analysis. DMSO served as a solvent as well as an oxidant. Moreover, N-substituted hydrazines provided 1-(1-substituted-3-aryl-1H-pyrazol-5-yl)-2-arylethane-1,2-diones regioselectively. Furthermore, for synthetic application, 1-aryl-2-(3-aryl)-1H-pyrazol-5-yl-ethane-1,2-diones were treated with o-phenylenediamine to afford pyrazole-functionalized quinoxaline in good yield. A control reaction was carried out to understand the mechanism of product formation.