Herein, we describe the formation of quaternary carbon centers with excellent diastereoselectivity via a strain-release protocol. An organometallic species is generated by Cp*Rh(III)-catalyzed C-H activation, which is then coupled with strained bicyclobutanes (BCBs) and a prochiral carbon electrophile in a three-component reaction. This work illustrates a rare example of BCBs in transition metal catalysis and demonstrates their broad potential to access novel reaction pathways. The method developed exhibits ample functional group tolerance, and the products can be further transformed into valuable α-quaternary β-lactones. Preliminary mechanistic investigations suggest a twofold C-C bond cleavage sequence involving σ-bond insertion and an ensuing β-carbon elimination event.