Ring-opening polymerization of epsilon-caprolactone has been carried out by using rare earth coordination catalysts for the first time. The rare earth compounds, RE(acac)3.3H2O, Nd (P204)3, Nd(P507)3, Nd (naph)3, Nd (BA)3.2H2O, etc. (where RE = La, Pr, Nd, Sm, Eu, Gd,Dy,Ho,Er,Lu,Y;acac=acetylacetone; [GRAPHICS] R = CH3 - (CH2)3 - CH (C2H5) - CH2 -; [GRAPHICS] n = 10-16; BA = benzoylacetone), combined with trialkyl aluminum, greatly increased the degree of conversion and the molecular weight of poly(epsilon-caprolactone) (PCL). The influence of reaction conditions on the polymerization of epsilon-caprolactone catalyzed by the Nd(acac)3.3H2O-AlEt3 system has been examined in detail. The kinetics indicates that the polymerization rate has the first-order in monomer and a half-order in catalyst. The overall activation energy of the ring-opening polymerization amounts to 59.4 kJ/mol. By IR and UV-Vis spectra, H-1- and C-13-NMR data, it is assumed that the ring-opening polymerization of epsilon-caprolactone catalyzed by the Nd(acac)3.3H2O-AlEt3 system proceeds via complexation of monomer to catalyst, acyl-oxygen cleavage insertion propagation mechanism.