AB block copolymers of ϵ‐caprolactone and (L)‐lactide could be prepared by ring‐opening polymerization in the melt at 110°C using stannous octoate as a catalyst and ethanol as an initiator provided ϵ‐caprolactone was polymerized first. Ethanol initiated the polymerization of ϵ‐caprolactone producing a polymer with ϵ‐caprolactone derived hydroxyl end groups which after addition of L‐lactide in the second step of the polymerization initiated the ring‐opening copolymerization of L‐lactide. The number‐average molecular weights of the poly(ϵ‐caprolactone) blocks varied from 1.5 to 5.2 × 103, while those of the poly(L‐lactide) blocks ranged from 17.4 to 49.7 × 103. The polydispersities of the block copolymers varied from 1.16 to 1.27. The number‐average molecular weights of the polymers were controlled by the monomer/hydroxyl group ratio, and were independent on the monomer/stannous octoate ratio within the range of experimental conditions studied. When L‐lactide was polymerized first, followed by copolymerization of ϵ‐caprolactone, random copolymers were obtained. The formation of random copolymers was attributed to the occurrence of transesterification reactions. These side reactions were caused by the ϵ‐caprolactone derived hydroxyl end groups generated during the copolymerization of ϵ‐caprolactone with pre‐polymers of L‐lactide. The polymerization proceeds through an ester alcoholysis reaction mechanism, in which the stannous octoate activated ester groups of the monomers react with hydroxyl groups. © 1997 John Wiley & Sons, Inc.