A simple, inexpensive, environmentally friendly, and highly efficient benzylation and allylation of 1,3-dicarbonyl compounds with sulfonamides in the presence of Yb(OTf)3 is described. Yb(OTf)3 was proved to be a good catalyst for the cleavage of sp3 carbon–nitrogen bond. Various 1,3-dicarbonyl compounds can couple with a broad range of tosyl-activated benzylic and allylic amines to give diversely functionalized products in good to excellent yields.