Since the advent of penicillin, the beta-lactam antibiotics have been the subject of much discussion and investigation, within both the scientific and public sectors. The primary biological targets of the beta-lactam antibacterial drugs are the penicillin binding proteins, a group of transpeptidases anchored within the bacterial cellular membrane, which mediate the final step of cell wall biosynthesis. The extensive use of common beta-lactam antibiotics such as penicillins and cephalosporins in medicine has resulted in an increasing number of resistant strains of bacteria through mutation and beta-lactamase gene transfer. Thus, a handful of nonconventional fused polycyclic beta-lactams have been described in the literature in order to overcome the defence mechanisms of the bacteria. In fact, tricyclic beta-lactam antibiotics, generally referred to as trinems, are a new class of synthetic antibacterial agents featuring good resistance to beta-lactamases and dehydropeptidases. In addition, recent discoveries have shown other biological properties of these compounds apart from their antibacterial action. In this sense, beta-lactams can serve as inhibitors of serine proteases, such as human leukocyte elastase (HLE) or thrombin, acyl-CoA cholesterol acyltransferase inhibitors and inhibitors of human cytomegalovirus. Additional impetus for research efforts on beta-lactam chemistry has been provided by the introduction of the beta-lactam synthon method, a term coined by Ojima 20 years ago, according to which 2-azetidinones can be employed as useful intermediates in organic synthesis. The usefulness of beta-lactams in the stereocontrolled synthesis of heterocycles of biological significance is based on the impressive variety of transformations, which can be derived from this system, due inter alia to a high chirality content that can be transferred into a variety of products. The cyclic 2-azetidinone skeleton has been extensively used as a template on which to build the heterocyclic structure fused to the four-membered ring, using the chirality and functionalisation of the beta-lactam nucleus as a stereocontrolling element. Alternatively, the direct one-pot generation of fused nitrogen heterocyclic systems from the nitrogen framework of 2-azetidinone derivatives has been achieved by selective bond breakage and rearrangement. It is our aim in this Review to highlight the state of the art in this endeavour, consisting either of the stereocontrolled synthesis of fused polycyclic beta-lactams of antibacterial interest, or stereoselective synthesis of different sized heterocycles of biological significance. Representative examples of the latter include indolizidines, pyrrolizidines, pirrolidines, pyrroles, taxoids and macrolide natural products.