The gamma- and delta-lactones of less than 12 carbons constitute a group of compounds of great interest to the flavour industry. It is possible to produce some of these lactones through biotechnology. For instance, gamma-decalactone can be obtained by biotransformation of methyl ricinoleate. Among the organisms used for this bioproduction, Yarrowia lipolytica is a yeast of choice. It is well adapted to growth on hydrophobic substrates, thanks to its efficient and numerous lipases, cytochrome P450, acyl-CoA oxidases and its ability to produce biosurfactants. Furthermore, genetic tools have been developed for its study. This review deals with the production of lactones by Y. lipolytica with special emphasis on the biotransformation of methyl ricinoleate to gamma-decalactone. When appropriate, information from the lipid metabolism of other yeast species is presented.