A route has been developed which allows synthesis of novel cyclobutanone analogues of penicillin. This is illustrated by the synthesis of (1R,4R,5R,5'R,7S)-(1b) and (1S,4S,5S,5'R,7R)-7-[5'-amino-5'-carboxy]pentanamido]-2-thiabicyclo[3.2.0]he ptan-6-one-4-carboxylate (1a), an analogue of penicillin N. The key steps in the synthesis were the formation of the bicyclic structure via a [2+2] cycloaddition and the introduction of nitrogen at C7 via an intramolecular nitrene insertion.