Intramolecular reactions between isocyano and iminophosphorane functions yield species containing an embedded 1,3,2-diazaphosphetidine ring, as result of the [2 + 2] cycloaddition of the primary reactive product, the cyclic carbodiimide, with a second unit of reactant. DFT studies reveal a first rate-determining step entailing a [2 + 1] cycloaddition involving the isocyanide carbon atom and the P═N double bond, with the further intervention of a dipolar precursor of the intermediate carbodiimide. The 1,3,2-diazaphosphetidine ring of the final products is shown to be hydrolytically and thermally labile.