γ-Substituted allylic alcohols react with CO in the presence of catalytic quantities of palladium acetate and 1,4-bis(diphenylphosphino)butane affording R, -substituted-γ-butyrolactones in 42-85% isolated yields. The complete stereoselectivity observed in some cases is a significant feature of the lactonization reaction, with (E)-allylic alcohols affording trans-disubstituted lactones. Depending on the structure of the allylic alcohol used in the cyclocarbonylation reaction, the formation of the corresponding alkene or the ,γ-unsaturated carboxylic acid was observed as a side or the principal reaction.