The stability and reactivity of mono‐ and multi‐protonatred N‐substituted isatin derivatives were studied at PBE0/aug‐cc‐pvtz//PBE0/6‐31+G** level of theory in triflic acid (TFSA) solution. Calculations showed that the monocationic intermediates are the principal reactive species in the reaction of hydroxyalkylation of isatin derivatives in TFSA media. Electron‐withdrawing substituents on the nitrogen atom increase the reactivity of isatin‐containing electrophiles towards aromatic hydrocarbons, in accordance with their expected electronic influence. Steric factors also play an important role in the reactivity of isatin‐containing electrophiles, especially in the second reaction step, due to their more sterically hindered reactive center.