Successive treatment of a phenyl thioether derived from (S)-malic acid with n-BuLi, lithium naphthalenide (LN), and electrophiles led to 4-hydroxy-3-substituted 2-pyrrolidinones in one-pot and in high regio- and diastereoselectivity at C-3. N-Debenzylation of 1-benzyl-4-hydroxy-2-pyrrolidinone using LN afforded naturally occurring (-)-(S)-4-hydroxy-2-pyrrolidinone. (-)-(3S,4S)-4-Hydroxy-3-methyl-2-pyrrolidinone, the lactam form of the y-amino acid residue found in marine natural products, bistramides, was prepared by the same method. (C) 1999 Elsevier Science Ltd. All rights reserved.