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Lactones are cyclic esters with extensive applications in materials science, medicinal chemistry, and the food and perfume industries. Nature’s strategy for the synthesis of many lactones found in natural products always relies on a single type of retrosynthetic strategy, a C−O bond disconnection. Here, we describe a set of laboratory-engineered enzymes that use a new-tonature C−C bond-forming strategy to assemble diverse lactone structures. These engineered “carbene transferases” catalyze intramolecular carbene insertions into benzylic or allylic C−H bonds, which allow for the synthesis of lactones with different ring sizes and ring scaffolds from simple starting materials. Starting from a serine-ligated cytochrome P450 variant previously engineered for other carbene-transfer activities, directed evolution generated a variant P411-LAS-5247, which exhibits a high activity for constructing a five-membered ε-lactone, lactam, and cyclic ketone products (up to 5600 total turnovers (TTN) and >99% enantiomeric excess (ee)). Further engineering led to variants P411-LAS-5249 and P411-LAS-5264, which deliver six-membered δ-lactones and seven-membered ε-lactones, respectively, overcoming the thermodynamically unfavorable ring strain associated with these products compared to the γ-lactones. This new carbene-transfer activity was further extended to the synthesis of complex lactone scaffolds based on fused, bridged, and spiro rings. The enzymatic platform developed here complements natural biosynthetic strategies for lactone assembly and expands the structural diversity of lactones accessible through C−H functionalization.