Factors affecting the enzymatic intramolecular lactonization of 16-hydroxyhexadecanoic acid are presented. A screen of 33 enzymes, predominantly lipases, showed chat only a proportion were able to catalyze the synthetic reaction in a microaqueous environment Certain of these enzymes showed no observable formation of the oligolactones by the favored intermolecular esterification reaction, as reported by other workers. Indeed, the immobilized lipase from Candida antarctica showed formation of the intramolecular monolactone product, hexadecanolide, which could be produced continuously for 55 hs. Many variables were considered, including the choice of enzyme (source and preformulation), substrate concentration, product concentration solvent, temperature, pH, and water content of the system. The effect of these variables on hexadecanolide yield was analyzed statistically using a Plackett-Burman matrix. Significant effects were only demonstrated for the product hexadecanolide (stimulatory) and the substrate 16-hydroxyhexadecanoic acid (inhibitory).