Converting biomass derived levulinic acid (LA) to γ-valerolactone (GVL) through catalytic transfer hydrogenation, using Lewis acidic catalysts and alcohols as hydrogen donors, is an important route for biomass valorization. Zeolites containing Lewis acidic metal ions have been widely studied for catalytic transfer hydrogenation of LA. On the other hand, zeolites themselves have Al-Lewis acid sites, inherent to their aluminosilicate framework, and these sites can be generated and tuned through simple post-synthesis methods. The present study shows that properly tuned Al sites in Y zeolites can catalyze LA to GVL conversion, and the key requirement for this conversion is creating more penta-coordinated Al sites in the catalyst. In order to establish this, a series of thermally-treated (500–800 °C) and steam-treated (500 and 700 °C) Y zeolites were prepared, characterized by X-ray diffraction, N2 adsorption, temperature programmed desorption of NH3, 27Al MAS NMR spectroscopy and pyridine adsorption – FTIR spectroscopy and then tested for LA to GVL conversion. Thermal dealumination of NH4Y zeolite at 700 °C (TY700) gave the highest percentage (21%) of penta-coordinated Al and it was found to be more selective (∼94%) in forming GVL than other catalysts studied under the optimized conditions. The turnover frequency of formation GVL, (TOFGVL) from isopropyl levulinate (IPL) on TY700 was three times higher than that of TY500 (NH4Y thermally treated at 500 °C). During the reaction, acid sites of the zeolite catalyze esterification of LA with isopropyl alcohol and hence LA is readily converted to isopropyl levulinate and then Meerwein–Ponndorf–Verley (MPV) reduction of IPL leads to the formation of isopropyl 4-hydroxy pentanoate, which undergoes lactonization to form GVL. Based on the experimental results, a plausible reaction mechanism involving the penta-coordinated Al Lewis acid sites and -Al-OH group was proposed.