Derivatization of azaarenes can create molecules of biological importance, but reductive functionalization of weakly reactive azaarenes remains a challenge. Here the authors show a dearomative, diastereoselective annulation of azaarenes, via ruthenium(II) reductive catalysis, proceeding with excellent selectivity, mild conditions, and broad substrate and functional group compatibility. Mechanistic studies reveal that the products are formed via hydride transfer-initiated β-aminomethylation and α-arylation of the pyridyl core in the azaarenes, and that paraformaldehyde serves as both the C1-building block and reductant precursor, and the use of Mg(OMe)2 base plays a critical role in determining the reaction chemo-selectivity by lowering the hydrogen transfer rate. The present work opens a door to further develop valuable reductive functionalization of unsaturated systems by taking profit of formaldehyde-endowed two functions.