Renewable biomass based levulinic acid was converted to 5-methyl-2-pyrrolidone in 94% yield by a Raney-Ni catalyzed process using ammonium formate in aqueous medium and heating at 180 °C for 3 h. The Raney-Ni could be reused for four catalytic cycles with about 10% loss in catalytic activity. In a similar reaction levulinic acid could be converted 1-substituted-5-methyl-2-pyrrolidones in 90–95% yield by using a mixture of formic acid and the corresponding primary amine.