Thanks to the ability of diazo derivatives to react either as 1,3‐dipoles and as carbenes after dinitrogen extrusion, combinations of oxa or aza benzonorbornadienes and diazomalonates afford polycyclic pyrazolidines via a three‐step sequence of (i) a highly diastereoselective [3+2]‐cycloaddition, (ii) a CpRu‐catalyzed carbene addition, and (iii) a second dipolar cycloaddition. Of importance, step (II) represents a unique access to novel bench‐stable N,N‐cyclic azomethine imines, which behave as effective 1,3‐dipoles in combination with electron‐poor dipolarophiles. Each step proceeds efficiently and the 3‐step process can be performed in one‐pot to yield a polycyclic pyrazolidine in excellent overall yield (90%).