Musk macrolides are a kind of rare flavors structurally featuring 14−16 membered rings in the flavour and fragrance industry. While various chemical synthesis routes for musk macrolides exist, there is a growing interest in biocatalytic approaches. In this study, a new biocatalytic approach is proposed for the synthesis of musk macrolides from fatty acids using unspecific peroxygenases (UPOs) in combination with lipase. Specifically, the UPO from Marasmius rotula (MroUPO) was utilized as an oxidation catalyst together with the choline oxidase from Arthrobacter nicotinate (AnChOx) for the in situ generation of H2O2. The enzymatic cascade process involved the hydroxylation of fatty acids using MroUPO as a catalyst to prepare terminal hydroxylated fatty acids. Under the optimized conditions, 14-hydroxy tetradecanoic acid, 15-hydroxy pentadecanoic acid and 16-hydroxy hexadecanoic acid were obtained at concentrations of 11.1, 18.2 and 17.1 mg/L in a 50-mL reaction system, respectively. These hydroxylated fatty acids were then separated and esterified by lipase Novozymes 435 to produce the desired macrolides. Various ω-hydroxy fatty acids were successfully converted into macrolides, with the concentrations of cyclotetradecanolide, cyclopentadecanolide and cyclohexadecanolide reaching 11, 29 and 23 mg/L, respectively, in a 10-mL reaction system. This new biocatalytic approach represents a promising method for synthesizing valuable natural flavour compounds.