The high fraction of sp³-hybridized carbon atom (Fsp³) character of cyclobutane derivatives renders them as highly promising bioisosteres for otherwise typically flat arenes. Here, to address the current needs in medicinal chemistry for Fsp³-rich molecules, we disclose a distinct strategy that exploits the merger of C–C scission in bicyclo[1.1.0]butanes (BCBs) with ruthenium-catalysed remote C−H functionalization of heteroarenes, affording densely substituted cyclobutanes in a chemo-controlled manner. This approach enabled the rapid and efficient synthesis of versatile tri- and tetrasubstituted cyclobutanes by coupling a wide range of mono- or disubstituted BCBs with heteroarenes and alkyl halides under mild reaction conditions, featuring ample substrate scope. The C–C/C–H functionalization was ensured by a multifunctional ruthenium(II) catalyst that enabled ruthenacycle-mediated halogen-atom transfer (Ru-XAT), as well as the selective functionalization of BCBs by strain release. Experimental and computational mechanistic studies unravelled a multi-catalysis manifold, while the C–H/C–C functionalization strategy allowed for telescoping late-stage modification.