Up to now, the direct conversion of the thiadiazole ring to other heterocyclic rings has been a very challenging task. Herein, a CdII‐mediated alcohol‐substitution strategy for direct conversion from benzothiadiazole to benzimidazole is reported. Experimental and molecular modeling studies on the role of the chelated metal ion in this in situ alcohol‐substitution reaction revealed that it serves as an all‐rounder that is involved in the insertion of alcohol, activation of the thiadiazole ring by coordinative interaction, and the sulfur‐extrusion process. Interestingly, the insertion of alcohol occurs much earlier than the sulfur‐extrusion process, supported by a water‐mediated proton‐transfer process. This strategy also is suitable for constructing new benzimidazole‐derived MOFs [Cd2(HMBIDC2−)2]⋅4 H2O (Cd‐BID‐MOF‐1, HMBIDC2−=2‐methyl‐1H‐benzimidazole‐4,7‐dicarboxylate) and [Cd2(HPBIDC2−)2]⋅1/3 H2O (Cd‐BID‐MOF‐2, HPBIDC2−=2‐(3‐hydroxypropyl)‐2H‐benzimidazole‐4,7‐dicarboxylate). Because the terminal hydroxyl group on the imidazole ring protrudes into the circular channel in rhombohedral Cd‐BID‐MOF‐2, the cavity is closer to hydrophilic than the honeycomb‐like cavity in Cd‐BID‐MOF‐1 with similar 3D structure. This rare observation will provide a new strategy to develop in situ ligand‐reaction synthesis of functional MOFs and useful chelation‐assisted catalytic reactions in heteroaromatic chemistry.