The synthesis of 1,2,10,11-tetrahydro-9H-cyclobuta[c]benzo[e]indol-4-one (17, CbBI), which contains a deep-seated fundamental structural modification in the CC-1065 and duocarmycin alkylation subunit consisting of the incorporation of a ring-expanded fused cyclobutane (vs cyclopropane), its chemical and structural characterization, and its incorporation into a key analogue of the natural products are detailed. The approach to the preparation of CbBI was based on a precedented (Ar-3' and Ar-5') but previously unknown Ar-4' spirocyclization of a phenol onto a tethered alkyl halide to form the desired cyclobutane. The conditions required for the implementation of the Ar-4' spirocyclization indicate that the entropy of activation substantially impacts the rate of reaction relative to that for the much more facile Ar-3' spirocyclization, while the higher enthalpy of activation slows the reaction relative to an Ar-5' spirocyclization. The characterization of the CbBI-based agents revealed their exceptional stability and exquisite reaction regioselectivity, and a single-crystal X-ray structure analysis of N-Boc-CbBI (13) revealed their structural origins. The reaction regioselectivity may be attributed to the stereoelectronic alignment of the two available cyclobutane bonds with the cyclohexadienone π-system, which resides in the bond that extends to the less substituted cyclobutane carbon for 13. The remarkable stability of N-Boc-CbBI (which is stable even at pH 1) relative to N-Boc-CBI containing a cyclopropane (t(1/2) = 133 h at pH 3) may be attributed to a combination of the increased extent of vinylogous amide conjugation, the nonoptimal geometric alignment of the cyclobutane with the activating cyclohexadienone, and the intrinsic but modestly lower strain energy (1.8 kcal/mol) of a cyclobutane versus a cyclopropane.