Owing to their biological significance, increased efforts are being directed towards the production of lactones in optically pure form. One method of synthesis is via a microbial equivalent of the Baeyer-Villiger reaction. This reaction is common in microorganisms possessing a monooxygenase enzyme which is induced as part of the catabolic machinery responsible for the assimilation of cyclic alcohols or ketones. The stoichiometric requirement for NADPH as cofactor, however, makes this enzyme uneconomical for implementation on an industrial scale. Microorganisms in which the monooxygenase enzyme have been induced also possess a lactone hydrolase (lactonase) enzyme which is responsible for the hydrolysis of formed lactones to hydroxy acids. It is the aim of this project to investigate the potential for the use of these lactonases for the optical resolution of racemic lactones in a bid to produce the latter in optically pure form. Three inducible lactonases; 8-valerolactone hydrolase from Pseudomonas NCIMB 9872 grown on cyclopentanol, e-caprolactone hydolase from Acinetobacter NCIMB 9871 grown on cyclohexanol and s-caprolactone hydrolase from Rhodococcus coprophilus WT1 grown on cyclohexanol were selected for study. Growth studies, conducted in order to optimise lactonase production in each of the bacteria, revealed that in all three microorganisms, lactonase activity was induced throughout growth. High speed supernatants bearing the enzyme of interest were tested with a range of y- (5-membered ring), 8- (6-membered ring) and s- (7-membered ring) lactones. These lactonases only showed activity towards (8- and s-) lactones. Enantioselectivity studies using 8-decanolactone as substrate showed 8-valerolactone hydrolase from Pseudomonas NCIMB 9872 to have the greatest enantioselectivity with a %enantiomeric excess after 60% transformation for residual lactone of greater than 98%. The lactonases from Acinetobacter NCIMB 9871 and R. coprophilus WT1 only showed modest enantioselectivity towards this substrate with 6% and 15% enantiomeric excess after 60% transformation for residual substrate respectively. 8-Valerolactone hydrolase was purified from high speed supernatant fractions of Pseudomonas NCIMB 9872 using a two step purification procedure involving anion exchange chromatography and hydrophobic interaction chromatography. This enzyme is a monomer with molecular weight of approximately 28kda and an isoelectric point of about 4.5. Kinetic studies indicate that this enzyme obeys classical Michaelis-Menten kinetics, has a pH optimum of about 7.5 and a temperature optimum between 28 and 30°C. In addition the first 15 amino acid residues starting at the NH2 terminus are reported. Inhibitor studies suggest that this enzyme does not depend on sulfhydryl groups for its activity. However, there is a metal ion dependency since EDTA and citrate inhibited lactonase activity.