Bicyclic .beta.-lactams comprising a 5- or 6-membered lactone or lactam ring are obtained in a process comprising a base induced intramolecular cyclization of a 4-substututed .beta.-lactam having a leaving group in the 1-position. An intramolecular nucleophile transfer reaction is proposed as the operative mechanism and the bicyclic .beta.-lactams are obtained in the required stereochemical form for biological activity. The compounds provided are useful intermediates for the preparation of antibiotics and .beta.-lactamase inhibitors.