An intramolecular base-catalyzed nitroaldol reaction of three newly prepared 2-(2-nitroalkyl)benzaldehydes (1a-c) giving corresponding 2-nitroindan-1-ols (2a-c) was studied in water and five non-aqueous solvents. Whilst for the parent 2-(2-nitroethyl)benzaldehyde (1a) the reaction takes place in two kinetically discernible steps - deprotonation and cyclization, for 2-(2-nitropropyl)- and 2-(2-nitro-2-phenylethyl)benzaldehydes 1b and 1c general base-catalyzed formation of a reactive carbanion is rate-limitting. An unusually high Bronsted coefficient (beta(B)=1.12 +/- 0.03) was found for 1b indicating smaller imbalance of the transition state whose structure therefore resembles a nitronate. Cyclization products 2a-c prefer relative trans-configuration in ratios from 55:45 to 83:17 depending on the solvent. Mutual interconversion of the cis-/trans-diastereoisomers occurs either via nitronate species 2a(-) or via a reverse ring opening/ring closing pathway through the nitronate species 1b(-) and 1c(-). The mechanism was also supported by quantum calculations.