A series of ethanolamine‐derived Ugi four‐component‐reaction adducts were subjected to a base‐mediated cycloisomerization/rearrangement cascade to give functionalized 2,5‐pyrrolidinediones in good‐to‐excellent yields. The method was extended to amino‐acid‐derived chiral ethanolamines to access enantiomerically pure 2,5‐pyrrolidinediones. The reaction is diastereospecific, and mixtures of 2,5‐pyrrolidinediones and β‐lactams were formed with high enantiomeric excess. Mechanistic studies revealed that the reaction proceeds through the formation of a β‐lactam intermediate by intramolecular cyclization in a 4‐exo‐dig fashion. This then rearranges further to give the 2,5‐pyrrolidinedione with the help of the hydroxyethyl appendage. Computational analysis of the reaction profile demonstrated that the intramolecular 4‐exo‐dig cyclization is energetically favoured over the 5‐endo‐dig pathway, so this results in the formation of the β‐lactam.

†Electronic Supplementary Information (ESI) available: [ 1 H and 13C NMR and HRMS spectra of all the new compounds, COSY and NOESY spectra of compounds 5a, 7 and 11, details of computational studies (Cartesian coordinates and absolute energies).See A highly diastereoselective Ugi three-component reaction (U3CR) involving chiral 3,4-dihydroisoquinolines (DHIQs), isocyanides and carboxylic acids has been developed to synthesize enantiopure 1,2,3,4-tetrahydroisoquinolines (THIQs). The inherent chirality of DHIQ at C-3 and C-4 controles the addition of isocyanide at C-1 to induce excellent diastereoselectivity. The method was applied to a variety of aromatic and aliphatic acids, and in most cases reaction proceeded smoothly without formation of any side product. The experimental and computational studies demonstrated the role of internal chirality in conformational stability of intermediate to control the facial selectivity and strong solvent effect on the reaction. Cytotoxicity of selected compounds was also evaluated against four types of human cancer cell lines MCF-7 (Breast cancer), MDA MB-231 (Breast cancer), DU-145 (Prostate cancer), A549 (Lung cancer) and HepG2 (Liver cancer) where few compounds exhibited GI50 values in submicromolar range.