Porcine liver esterase catalyses the reaction of γ-amino esters in water to give a mixture of the corresponding γ-lactam and the hydrolysis product, deacylation of the acyl enzyme intermediate by ring closure occurs with a high enantioselectivity giving an ee of 90% for the formation of (S)-5-phenyl-2-pyrrolidone from racemic ethyl 4-phenyl-4-aminobutanoate.