Intramolecular insertion of metal nitrenes into carbon-hydrogen bonds to form γ-lactam rings has traditionally been hindered by competing isocyanate formation. We report the application of theory and mechanism studies to optimize a class of pentamethylcyclopentadienyl iridium(III) catalysts for suppression of this competing pathway. Modulation of the stereoelectronic properties of the auxiliary bidentate ligands to be more electron-donating was suggested by density functional theory calculations to lower the C–H insertion barrier favoring the desired reaction. These catalysts transform a wide range of 1,4,2-dioxazol-5-ones, carbonylnitrene precursors easily accessible from carboxylic acids, into the corresponding γ-lactams via sp3 and sp2 C–H amidation with exceptional selectivity. The power of this method was further demonstrated by the successful late-stage functionalization of amino acid derivatives and other bioactive molecules.