Isothiourea-catalyzed multicomponent cascade reactions are challenging due to the existence of competitive side reactions between multiple reaction partners and intermediates. Herein, we report a practical and efficient protocol for the stereoselective divergent synthesis of pyrazolone-derived β-amino acid esters and β-lactams by isothiourea catalysis. Two distinct reaction pathways are identified, which are controlled by esterification or lactamization of the zwitterionic intermediate. The strategy is attractive because of the convenient one-step procedure, mild conditions, high stereoselectivity, and good functional-group tolerance.