A novel aza-Piancatelli rearrangement triggered cascade reaction has been developed by utilizing methyl furylacrylates as a new type of functionalized furanoxonium ion precursor, permitting rapid and flexible construction of diverse cyclopenta[b]pyrrolidinone derivatives. The unprecedented and highly efficient bicyclic γ-lactam product formation is originated from an unusual retro-aza-Piancatelli rearrangement of the major cis-fused multifunctionalized cyclopentenone to the minor trans-fused one followed by a lactamization reaction.