Rhodium catalyzed cyclization process for bicyclic .beta.-lactams

1-Carbapenam-2-one-3-carboxylic acid and 1-carba-3-hydroxy-3-cephem-4-carboxylic acid and esters thereof are provided by a process comprising a rhodium C.sub.2 -C.sub.10 carboxylate catalyzed cyclization of an ester of a 4-(1-alkoxy- or 1-substituted alkxoy)-2-oxo-4-azetidinyl)-.alpha.-diazo-.beta.-ketobutyric acid and an ester of a 5-(1-alkoxy- or 1-substituted alkoxy-2-oxo-4-azetidinyl)-.alpha.-diazo-.beta.-ketovaleric acid respectively. The process is carried out in an inert organic solvent at a temperature between about 15.degree. C. and about 85.degree.0 C. The 1-carba bicyclic .beta.-lactams are intermediates for preparing antibiotics.