Herein, a novel approach of bimetallic Pd(OAc)2/CuI-catalyzed alkynylation of 3-chloroazetidin-2-one (β-lactam derivative) with terminal alkyne via tandem C–C bond activation/Sonogashira-type cross-coupling reaction is developed. This synthesis encompasses a sequence of inert Csp3–X/Csp–H functionalization processes involving the coupling of the C(sp3) adjacent to the 3-chloroazetidin-2-one with the C(sp) of a terminal alkyne. The final analogs are synthesized by means of the indole-benzothiazole Schiff base formation, cyclization of the Schiff base to generate the β-lactam derivative, and Sonogashira coupling to afford a C(sp3)–C(sp) bond. In addition, indole, benzothiazole, and azetidine-2-one have been identified to be highly efficient heterocyclic scaffolds with a range of pharmacological benefits. It encouraged us to discover a hybrid compound that had each of these moieties. Cooperation between two different metals is essential for the successful implementation of this approach. Specifically, the interaction between the Pd and Cu centers in the transmetallation step is depicted through a plausible mechanistic route. The reaction conditions have been optimized by varying catalyst and ligand loadings, bases, temperatures, and solvents. The reaction is highly efficient, yielding alkynylated products in up to 84 % yield with a wide range of substrates and functional group tolerance, thereby serving as a functional model for the Sonogashira coupling reaction.