The mono-terminal hydroxyl groups of polybutadiene of varying chain length were studied as sites for initiation of lactone ring-opening polymerization by lipase catalysis. Novozyme-435 (immobilized Candida antarctica lipase B) was an effective catalyst for this acylation. Monohydroxyl-terminated polybutadiene with Mn of 2.6, 10, and 19 kg/mol efficiently initiated ω-pentadecalactone (PDL) and ε-caprolactone (CL) polymerization in toluene at 55 °C to give polybutadiene-b-polypentadecalactone and polybutadiene-b-polycaprolactone, respectively. For example, monohydroxyl-terminated polybutadiene with Mn 2.6 kg/mol initiated PDL ring-opening polymerization (1:25, OH:PDL) and formed a product with Mn 9.6 kg/mol in 19 h with 17 mol % chains initiated by water and >90% initiator efficiency. This method circumvented previously published chemical methods that required a metal catalyst and strict exclusion of moisture. A fractionation method was developed to separate the oligomers and to reduce the homopolymer contamination in the diblock copolymer. In situ NMR experiments were used to monitor the initiation of CL ring-opening polymerization with PBD-OH. Characterization of polymer was performed using 1H and 13C NMR spectroscopies and GPC.