In situ NMR and IR spectroscopy studies were carried out on the rearrangement of lithiated N‐benzyl‐N′‐aryl ureas, which involves N‐to‐C aryl transfer with retention of configuration. The IR spectroscopy studies revealed that initial benzylic lithiation was followed by migration of the aryl ring to yield a lithiated urea product without a detectable dearomatised intermediate. Similar results were obtained by NMR spectroscopy, but when 1,3‐dimethyl‐3,4,5,6‐tetrahydro‐2(1H)‐pyrimidinone (DMPU) was added to the solvent mixture, a transient dearomatised intermediate was detectable during migration of a 1‐naphthyl ring. DFT calculations highlight the importance of coordinated lithium cations, and their migration from one site to another, in the rearrangement. Rearrangement is initiated by migration of a solvated lithium cation from the anionic centre of the starting organolithium to a site close the adjacent phenyl ring, allowing retentive attack of the anionic centre on the more remote ring with movement of the solvated lithium cation to the remote ring stabilising the developing negative charge. A short‐lived spirocyclic intermediate is predicted to undergo elimination by loss of the urea substituent, completing the migration. Coordination of the carbonyl group to a second solvated lithium cation appears to be essential for this step. Calculated shifts for this intermediate when a 1‐naphthyl ring is migrating are consistent with the transient signals observed by NMR spectroscopy. Alternative pathways involving (1) invertive migration and (2) attack on the urea C=O group were also calculated and were found to require significantly higher energy transition states.