We report a novel rhodium-catalyzed rearrangement involving N-substituted 2-thiopyridones and diazoesters. This reaction proceeds through the rhodium-catalyzed formation of sulfur ylides, followed by a direct C-N bond cleavage to achieve N-to-C 1,4-pyridyl migration. The protocol can be used to construct various thiopyridines possessing tetrasubstituted carbon stereocenters in moderate to excellent yields, which expands the transformation pattern of sulfur ylide intermediates in rearrangement reactions.