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Access to 1,3‐functionalized azetidines through a diversity‐oriented approach is highly sought‐after for finding new applications in drug‐discovery. To this goal, strain‐release‐driven functionalization of azabicyclo[1.1.0]‐butane (ABB) has generated significant interest. Through appropriate N‐activation, C3‐substituted ABBs are shown to render tandem N/C3‐fucntionalization/rearrangement, furnishing azetidines; although, modalities of such N‐activation vis‐à‐vis N‐functionalization remain limited to selected electrophiles. This work showcases a versatile cation‐driven activation strategy of ABBs. And capitalizes on the use of Csp3 precursors amenable to forming reactive (aza)oxyallyl cations in situ. Herein, N‐activation leads to formation of a congested C−N bond, and effective C3 activation. The concept was extended to formal [3+2] annulations involving (aza)oxyallyl cations and ABBs, leading to bridged bicyclic azetidines. Besides the fundamental appeal of this new activation paradigm, operational simplicity and remarkable diversity should engender its prompt use in synthetic and medicinal chemistry. [ABSTRACT FROM AUTHOR]