Condensation of 3-toluoyl-1,2,2-trimethylcyclopentane-1-carboxylic acid 2 with hydrazine, diamines or 3-aminopropanol afforded the novel bicyclic 1,2-diazepinone 3 or various condensed azabicyclooctane derivatives 4-6, respectively. Further transformations of the 1,2-diazepinone 3 to its perhydro 7 and N-methyl 8 derivatives are also described. Compound 3 when treated with Zn/HC1 resulted in the azabicyclo[3.2.1] octanone derivative 9 by a stereoselective ring contraction. Lactone formation from 3 on treatment with acetic anhydride has also been attempted.