The oxidative hydroxylactonization of γ,δ- and β,γ-unsaturated carboxylic acids by a chemical cytochrome P-450 model and rat liver microsomal systems has been investigated. In the chemical system using meso-tetrakis(2,6-dichlorphenyl)porphyrin iron chloride [Fe(TDCIPP)Cl] with iodosylbenzene (PhIO), γ,δ-unsaturated carboxylic acids have been converted into δ-hydroxy-γ-lactones in high yield and with high stereoselectivity. As an example of a β,γ-unsaturated carboxylic acid, indomethacin has been converted into the corresponding β-hydroxy γ-lactone. Several experiments directed toward mechanistic elucidation of the lactonization exclude a mechanism occurring via an epoxide intermediate. The products have been used as standards to identify the metabolites in the microsomal oxidation. In the case of indomethacin, the γ-lactone form is detected as a metabolite in the rat liver microsomal system, in a yield of 1.33%; the yield is significantly decreased in the presence of 2-diethylaminoethyl-2,2-diphenylvalerate hydrochloride (SKF-525A) and under a mixed CO–O₂(4:1) atmosphere. Thus, these metabolites are considered to be formed by a cytochrome P-450-dependent reaction.