Abstract: Described is a process for producing C.sub.10 and/or C.sub.12 gamma-lactones from the corresponding C.sub.10 and/or C.sub.12 carboxylic acids by use of microorganisms of the genus Mortierella, whereby a culture of the genus Mortierella is grown in a medium containing a carbon source, nitrogen source, inorganic salts, vitamins and growth factors and wherein the carboxylic acid feed rate is controlled by the response of the dissolved oxygen level in culture medium in the presence of mineral oil (liquid white paraffin oil, U.S.P. or technical grade having a specific gravity of from 0.830 up to 0.905 at 60.degree. F. and a viscosity of from 50 up to 400 Sayboldt Seconds at 100.degree. F., a mixture of liquid C.sub.15 -C.sub.50 saturated hydrocarbons).