The dynamic kinetic resolution of beta-aryl alpha-keto esters has been accomplished using a newly designed (arene)RuCl(monosulfonamide) transfer hydrogenation catalyst This dynamic process generates three contiguous stereocenters with remarkable diastereoselectivity through a reduction/lactonization sequence. The resulting enantioenriched, densely functionalized gamma-butyrolactones are of high synthetic utility, as highlighted by several secondary derivatizations.