The enantioselective transfer hydrogenation of racemic β-keto γ-lactams via dynamic kinetic resolution using a chiral Ru(II) catalyst has been developed for the synthesis of optically active β-hydroxyl lactams with excellent conversion (up to 99 %), high diastereomeric ratio (dr 93:07) and enantiomeric selectivity (89 % ee). The reaction proceeded by using HCO2H/Et3N as hydrogen donor and features mild, additive free reaction conditions, fast crystallization, broad substrate scope, and an operationally simpler setup than that for molecular hydrogenation.