The intramolecular Schmidt reaction of alkyl azides and ketones has been demonstrated. The reaction is proposed to occur via initial attack of an azide on a ketone activated by a variety of protic or Lewis acids, including trifluoroacetic acid, titanium tetrachloride, and others. The resulting azidohydrin undergoes a direct rearrangement to afford the product amide and molecular nitrogen. When cyclic ketones are used, fused bicyclic lactams of types encountered in a wide variety of natural products are obtained. Although the distance allowed between the carbonyl group and the alkyl azide is quite restricted, the reaction is general with respect to the ketone component, including acyclic ketones and cyclic substrates ranging from standard to large ring sizes. The reaction also succeeds with aldehydes, although elimination or hydride migration products compete. In several cases examined, the reaction was found to proceed with retention of configuration at the migrating carbon. Competing reactions with beta-diketones and alpha,beta-unsaturated ketones were found to predominate over ring expansion.