Rearrangement reactions have attracted considerable interest over the past decades due to their high bond-forming efficiency and atom economy in the construction of complex organic architectures. In contrast to the well-established 3,3-rearrangement, 1,3 O-to-C rearrangement has been far less vigorously investigated, and stereospecific 1,3-rearrangement is extremely rare. Here, we report a metal-free intramolecular hydroalkoxylation/1,3-rearrangement, leading to the practical and atom-economical assembly of various valuable medium-sized lactams with wide substrate scope and excellent diastereoselectivity. Moreover, such an asymmetric cascade cyclization has also been realized by chiral Brønsted acid-catalyzed kinetic resolution. In addition, biological tests reveal that some of these medium-sized lactams displayed their bioactivity as antitumor agents against melanoma cells, esophageal cancer cells and breast cancer cells. A mechanistic rationale for the reaction is further supported by control experiments and theoretical calculations.