A facile, gram-scale preparation of 2-hydroxy-5,6,7,7a-tetrahydro-3H-pyrrolizin-3-ones and 2-hydroxy-6,7,8,8a-tetrahydroindolizin-3(5H)-ones from a condensation cyclization of α-oxoesters with five- and six-membered cyclic imines, respectively, is reported. This transformation enables a concise, three-step synthesis of the natural products phenopyrrozin and p-hydroxyphenopyrrozin. Further, biologically relevant scaffolds, such as α-quaternary β-homo prolines and β-lactams, are also prepared in two- to three-steps from the versatile 2-hydroxy-5,6,7,7a-tetrahydro-3H-pyrrolizin-3-one core.