Amino diphenylphosphinates, which are commercially available or easily prepared from hydroxylamine, undergo ring expansion of cyclobutanones toward γ-lactams under mild conditions. A reaction pathway profoundly different from the common Beckmann reaction is achieved through the ambivalent character of the aminating agent. Thus, rearrangement occurs from a Criegee-like intermediate prior to the formation of the oxime species, which is corroborated by mechanistic experiments. Based on this observation, the migrating aptitude of the adjacent groups is analyzed and found to be in line with the parent Baeyer-Villiger reaction rendering a regioselective (up to >99:1 rr), stereospecific (>99% enantiospecificity), and chemoselective (>99%) insertion process possible. The method thus qualifies for late-stage skeletal editing as showcased by the synthesis of Rolipram and its N-alkylated analogs.