In a previous preliminary study, we found that a cyclic five-member ring beta-keto ester (lactone) reacts with one molecule of urea and two of aldehyde to give a new family of spiro heterobicyclic aliphatic rings in good yields with no traces of the expected dihydropyrimidine (Biginelli) products. The reaction is driven by a regiospecific condensation of two molecules of aldehyde with urea and beta-keto-gamma-lactone to afford only products harboring substitutions exclusively in a syn configuration (Byk, G.; Gottlieb, H. E.; Herscovici, J.; Mirkin, F. J. Comb. Chem. 2000, 2, 732-735). In the present work ((a) Presented in part at ISCT Combitech, October 15, 2002, Israel, and Eurocombi-2, Copenhagen 2003 (oral and poster presentation). (b) Also in American Peptide Society Symposium, Boston, 2003 (poster presentation). (c) Abstract in Biopolymers 2003, 71 (3), 354-355), we report a large and exciting extension of this new reaction utilizing parallel organic synthesis arrays, as demonstrated by the use of chiral beta-keto-gamma-lactams, derived from natural amino acids, instead of tetronic acid (beta-keto-gamma-lactone) and the potential of the spirobicyclic products for generating "libraries from libraries". Interestingly, we note an unusual and important anisotropy effect induced by perpendicular interactions between rigid pi systems and different groups placed at the alpha position of the obtained spirobicyclic system. Stereo/regioselectivity of the aldehyde condensation is driven by the nature of the substitutions on the starting beta-keto-gamma-lactam. Aromatic aldehydes can be used as starting reagents with good yields; however, when aliphatic aldehydes are used, the desired products are obtained in poor yields, as observed in the classical Biginelli reaction. The possible reasons for these poor yields are addressed and clarify, to some extent, the complexity of the Biginelli multicomponent reaction mechanism and, in particular, the mechanism of the present reaction. Finally, we have investigated and proposed a mechanism for this new reaction by intercepting several intermediates.