A novel Pd/sulfoxide-catalyzed macrolactonization reaction of linear omega-alkenoic acids is reported that proceeds via serial ligand-catalyzed allylic C-H oxidation. The scope of this macrolactonization appears to be very broad. Aryl, alkyl, and (Z)-alpha,beta-unsaturated acids are all competent nucleophiles for this reaction, with the latter undergoing macrolactonization with no olefin isomerization. High functional group compatibility is observed that includes biologically and medicinally relevant functionality such as ortho-substituted salicylate esters, bis(indoyl)maleimides, and peptides. Evidence is provided to support the hypothesis that macrolactonization proceeds via inner-sphere functionalization from a templated pi-allylPd carboxylate intermediate.