Reporting an efficient method for the synthesis of β-lactams by the carbonylation of diazo compounds, using [Co2(CO)8] to corresponding ketenes, followed by [2 + 2] cycloaddition with imines. The newly developed strategy was successfully applied to electronically and structurally diverse substrates to produce the corresponding β-lactams under mild reaction conditions. Fourier transform infrared spectroscopy was employed to monitor ketene formation and the transformation of ketene into β-lactam. All the products were fully characterized by using various analytical and spectroscopic techniques.