Radical-initiated functionalization of bicyclo[1.1.0]butanes (BCBs) is a straightforward approach to accessing diverse cyclobutane derivatives. However, selective C(sp3)-H functionalization at the C2 position of BCBs remains scarce. Herein, a mild protocol for the hydrogen-evolution of C2 C(sp3)-H phosphorylation with BCBs enabled by photoinduced cobaloxime catalysis was realized in a regio- and diastereoselective manner. This oxidant- and additional photocatalyst-free method enabled C(sp3)-H phosphorylation with a wide range of BCBs and diarylphosphine oxides. The mechanism was studied via control experiments and DFT calculation. Moreover, the efficiency of this approach was highlighted in the synthesis of high-value, structurally complex molecules.