[reaction: see text] An efficient kinetic resolution of racemic gamma-hydroxy amides 1 was performed via Pseudomas cepacia lipase (PS-C)-catalyzed transesterification. The enzyme PS-C tolerates both variation in the chain length and different functionalities giving good to high enantioselectivity (E values of up to >250). The combination of enzymatic kinetic resolution with a ruthenium-catalyzed racemization led to a dynamic kinetic resolution. The use of 2,4-dimethyl-3-pentanol as a hydrogen source to suppress ketone formation in the dynamic kinetic resolution yields the corresponding acetates in good yield and good to high enantioselectivity (ee's up to 98%). The synthetic utility of this procedure was illustrated by the practical synthesis of the versatile intermediate gamma-lactone (R)-5-methyltetrahydrofuran-2-one.