γ-Butyrolactone (GBL) and γ-valerolactone (GVL) are two of the lactones with wide application in industry. The interactions of these two lactones with alcohols have been a subject of experimental research. This article reports the theoretical investigation of GBL/ethanol and GVL/ethanol mixtures throughout the entire composition range using molecular dynamics and ab initio calculations. Molecular dynamics simulation using the optimized potentials for liquid simulations force field reproduces the experimental thermodynamics results quite well. Investigation of the liquid structure show that ethanol interacts with GBL and GVL molecules at specific sites, namely, almost collinearly with the lactone Cdouble bondO bond, below and above the lactone ring plane, and between the Csingle bondC ring bonds of the lactone. While ab initio calculations largely support the interaction of ethanol with the lactones via O-H---O hydrogen bonds, hydrogen boding via lactone Csingle bondH and ethanol O clearly have a significant role as well. The O-H---O interactions are dominated by the carbonyl oxygen. Dispersion interactions seem to play a more important role in stabilizing those interactions in which the hydrogen bonding is via the lactone ring oxygen. Generally, the two lactones behave very similarly in both liquid and gas phase studies, with minor differences attributed to more steric hindrance due the methyl group in γ-valerolactone.