In the title ring System, the benzylic nitrogen (N7), whether substituted or not, is abnormally unreactive. Hydrolysis of the di-urethanes 3a or b occurs readily at N6 to give 10a or b, but not at all at N7. In 3d Pd—H2 removes very rapidly the benzyloxycarbonyl group at N6 but only very slowly the one at N7. The product 7 is the first example of a diazetidine unsubstituted on nitrogen which has been fully characterized.N6 in 7 or in 10a or b can be readily acylated (products 24, 13, 14), acyloxylated (23a–c, 3a, 3b, 11, 12), or methylated (25). All efforts to induce similar reactions at N7 in 7 or in its monosubstituted derivatives 23 or 24 failed.Diazetidine 7 is thermally very stable, but it is rapidly oxidized by a wide variety of reagents to 2,5-diphenyl-3,4-dimethylcyclopentadienone and nitrogen. There is no evidence for the intermediacy of the cyclic azo compound 19, even when the oxidation is carried out at −50 °C.