The 6-azabicyclo[3.2.1]octane ring system, prevalent in a range of biologically active molecules, is prepared through a novel semipinacol rearrangement utilizing a cyclic phosphorane or sulfite intermediate. The rearrangement proceeds with exclusive N-acyl group migration of a β-lactam ring and results in carbonyl functionality at the 7- and bridging 8-position of the bicycle. Precursor ring-fused β-lactam diols are prepared through a sequence of 4-exo trig carbamoyl radical cyclization, regioselective dithiocarbamate group elimination, and dihydroxylation.