A new highly active and selective catalyst for the synthesis of β-lactones from CO and epoxides is reported. The catalyst, [(N,N′-bis(3,5-di-tert-butylsalicylidene) phenylenediamino)Al(THF)2][Co(CO)4] ([(salph)Al(THF)2][Co(CO)4]) is easily prepared from the corresponding (salph)AlCl and NaCo(CO)4. At 50 °C and 880 psi of CO, the catalyst (1 mol %) carbonylates epoxides such as propylene oxide, 1-butene oxide, epichlorohydrin, and isobutylene oxide to the lactones β-butyrolactone, β-valerolactone, γ-chloro-β-butyrolactone, and β-methyl-β-butyrolactone in high yield. (R)-Propylene oxide was carbonylated to (R)-β-butyrolactone with retention of stereochemistry. Copyright © 2002 American Chemical Society.