Herein we report the synthesis of substituted indolizidines and related N-fused bicycles from simple saturated cyclic amines through sequential C-H and C-C bond functionalizations. Inspired by the Norrish-Yang Type II reaction, C-H functionalization of azacycles is achieved by forming α-hydroxy-β-lactams from precursor α-ketoamide derivatives under mild, visible light conditions. Selective cleavage of the distal C(sp2)-C(sp3) bond in α-hydroxy-β-lactams using a Rh-complex leads to α-acyl intermediates which undergo sequential Rh-catalyzed decarbonylation, 1,4-addition to an electrophile, and aldol cyclization, to afford N-fused bicycles including indolizidines. Computational studies provide mechanistic insight into the observed positional selectivity of C-C cleavage, which depends strongly on the groups bound to Rh trans to the phosphine ligand.