RH₂(OAc)₄-catalyzed coupling of α-diazo-γ-butyrolactams with a wide range of aliphatic and aromatic thiols leads to α-aryl(alkyl)thiolactams in generally good yields. The transformation was found to be tolerant to sterically hindered thiols in contrast to analogous O–H insertion. Moreover, the same diazo lactams can be easily converted to β-aryl(alkyl)thiolactams in two steps using one-pot protocol. Consequently, the continued synthetic exploration of α-diazo-γ-butyrolactams paves the way toward two medicinally important scaffolds.