Human paraoxonase (PON1) was previously shown to hydrolyze over 30 different lactones (cyclic esters). In the present study purified human PON1 was found to catalyze the reverse reaction (lactonization) of a broad range of hydroxy acids. Hydroxy acid lactonization or lactone hydrolysis is catalyzed until equilibrium between the open and closed forms is reached. Lactonization by PON1 was calcium-dependent, had a pH optimum of 5.5-6 and could be stimulated with dilauroylphosphatidylcholine. Rabbit serum PON3 and a serine esterase in mouse plasma, presumably a carboxylesterase, also catalyzed hydroxy acid lactonization. Two endogenous oxidized unsaturated fatty acids, (+/-)4-hydroxy-5E,7Z,10Z,13Z,16Z,19Z-docosahexaenoic acid (4-HDoHE) and (+/-)5-hydroxy-6E,8Z,11Z,14Z-eicosatetraenoic acid (5-HETE) lactone, were very efficiently lactonized and hydrolyzed, respectively, by PON1. Human and mouse plasma samples also catalyzed 4-HDoHE lactonization and 5-HETE lactone hydrolysis. Studies with the PON1 inhibitor EDTA and the serine esterase inhibitor phenylmethylsulfonylfluoride suggest that about 80-95% of both activities can be attributed to PON1 in the human samples. In the mouse sample, PON1 accounted for about 30% of the 4-HDoHE lactonizing activity and 72% of the 5-HETE lactonase activity. Our results demonstrate that PON1 can lactonize the hydroxy acid form of its lactone substrates and that reversible hydrolysis of lactones may be a property of lactonases that is not generally considered. Also, the high activity of PON1 towards 4-HDoHE and 5-HETE lactone suggests that oxidized eicosanoids and docosanoids may be important physiological substrates for PON1.