The first β-lactone synthetase enzyme is reported, creating an unexpected link between the biosynthesis of olefinic hydrocarbons and highly functionalized natural products. The enzyme OleC, involved in the microbial biosynthesis of long-chain olefinic hydrocarbons, reacts with syn- and anti-β-hydroxy acid substrates to yield cis- and trans-β-lactones, respectively. Protein sequence comparisons reveal that enzymes homologous to OleC are encoded in natural product gene clusters that generate β-lactone rings, suggesting a common mechanism of biosynthesis.