Lactones has gained increasing attention in recent years due to wide application in polymer and pharmaceutical industries. Traditional synthetic methods of lactones often involve harsh operating temperature, use of strong alkalis and toxic oxidants. Therefore, lactonization of diols under milder conditions have been viewed as the most promising route for future commercialization. A variety of metal catalysts (Ru, Pt, Ir, Au, Fe, Cu, Co, and Zn) have been developed for highly efficient oxidant-, acceptor-, base- and additive-free lactonization processes. However, only a few initial attempts have been reported with no further details on catalytic mechanism being disclosed in literature. There demands a systematic study of the mechanistic details and the structure-function relationship to guide the catalyst design. In this work, we critically reviewed and discussed the structure-function relationship, the catalytic reaction mechanism, the catalyst stability, as well as the effect of oxidant and solvent for lactonization of diols. This work may provide additional insights for the development of other oxygen-containing functional molecules for material science and technologies.