A series of C4-keto-functionalized 1-[(benzoyloxy)(ethoxycarbonyl)methyl]-2-azetidinones were prepared and studied for their tendency to undergo a Reformatsky-type cyclization to fused bicyclic or tricyclic beta-lactams with the single-electron reducing agent samarium diiodide. Whereas the azetidinone 21a underwent reductive cyclization, affording the potent antibiotic sanfetrinem's tricyclic [4.5.6] core structure as the major component, all other examples tested resulted in cyclization followed by an N to O acyl migration involving cleavage of the beta-lactam ring as the favored pathway. Highly functionalized proline derivatives were therefore accessed as single diastereomers through the reductive cyclization of benzoates 21b, 22, 23a,b, 24b, and 25-28. Pertinent for the success of these cyclizations was the addition of 1 equiv of tert-butyl alcohol, allowing for the protonation of the basic amide derivative obtained after the acyl migration step. The diastereoselectivities of these reactions deviate from those of similar cyclizations involving the corresponding lithium enolate. This divergence could be rationalized by the coordination of the metal ion of the samarium(III) enolate intermediate to the beta-lactam amide functionality in the cyclization step, which may not be possible for lithium enolates.