2-Alkyl- and 2,4-dialkyl-3-iodo-1-oxocyclohexan-2,4-carbolactones undergo lithium hydroxide- and lithium alkoxide-induced fragmentation reactions to provide butenolides, gamma-hydroxycyclohexenones, and/or gamma-butyrolactones. In general, product distribution is governed by two factors: (1) the nature of nucleophiles and (2) the steric bulkiness of the substituents at C-2 and C-4 of the cyclohexanones. Lithium hydroxide-induced fragmentation provides butenolides and gamma-hydroxycyclohexenones. In contrast, lithium alkoxide-promoted fragmentation results in predominantly 5-substituted gamma-butyrolactones along with a small amount of butenolides in limited cases. Fragmentation products induced by lithium hydroxide are largely influenced by the steric bulkiness of the substituents at C-2 and C-4 of the cyclohexanone ring. The bulky substituents render the exclusive formation of butenolides.