The condensation of a 2-substituted-2-aminoethanol with methyl 2'-formylbiphenyl-2-carboxylate produces only two of the four possible axially chiral 6,7-dihydrodibenz[c,e]oxazolo[3,2-a]azepin-9(4bH)-ones (fused oxazolidine lactams), with kinetically controlled diastereoisomer ratios of up to 96 : 4. Within each lactam product the central chirality of the oxazolidine-fused benzylic position C(4b) is relayed to the biaryl axis with unit efficiency, the mis-matching of these stereogenic elements being prohibited due to strain, as predicted by molecular mechanics calculations. Diastereoisomeric lactam pairs can be equilibrated by heating with acid, and under these thermodynamic conditions reversed diastereoisomer ratios of up to 26 : 74 are observed.