As the smallest fused hydrocarbon and one of the most strained carbocycles, bicyclo[1.1.0]butane (BCB) undergoes a wide array of strain-releasing transformations, thereby exhibiting a rich and varied chemical profile. Although BCBs have been synthesized and studied for over 60 years, its potential as a versatile building block for expanding chemical space has remained largely underexplored. Recently, the emergence of diverse activation strategies, such as photocatalysis, boryl radical catalysis, Lewis/Brønsted acid catalysis, palladium catalysis, Lewis base catalysis, and radical relay strategies, has revolutionized BCB chemistry into a powerful toolbox for expanding the chemical space of scaffold-diverse molecules, with a particular focus on cyclobutane, cyclobutene, and bicyclo [n.1.1]alkane scaffolds. In this review, we highlight the latest advancements in the divergent transformations of BCBs to construct cyclobutyl-decorated architectures from common precursors, with a particular emphasis on elucidating the reaction mechanisms. The content is organized based on key regulatory factors for product divergent formation. It is anticipated that this review will stimulate increased interest among researchers in integrating the concept of controllable divergent synthesis into BCB chemistry. By doing so, it is expected to further unlock the potential of BCBs in expanding molecular space and to extend the reach of BCB chemistry into a wider array of synthetic applications.