Allyl halides of different structures, under CO pressure, in the presence of Et3N, a catalytic amount of Pd(OAc)2, and triphenylphosphane as ligand, undergo a [2+2] cycloaddition reaction with various imines. The reaction is highly regio‐ and stereoselective: β‐lactams are formed in good yields and with trans diastereoselectivity in both the β‐lactam ring and the vinylic moiety. New and important information is suggested regarding the known reaction mechanism. (© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2004)