The mechanism on microbial transformation of castor oil to γ-decalactone through β-oxidation by various microorganisms and a series of research progress related of about producing γ-decalactone by Yarrowia lipolytica were reviewed. Our works on the genetic modification of Yarrowia lipolytica for producing high yield of γ-decalactone using homologous recombination gene knockout and self-cloning technology was introduced. Finally, outlook of constructing high-yield of γ-decalactone producing strains was given, in order to lay the foundation for research directions in the future.