SmI2-H2O reduces cyclic 1,3-diesters to 3-hydroxyacids with no over-reduction. Furthermore, the reagent system is selective for cyclic 1,3-diesters over acyclic 1,3-diesters and esters. Experimental and computational studies suggest that the origin of the selectivity ties in the initial electron transfer to the ester carbonyl and the anomeric stabilization of the resulting radical-anion intermediate. Radicals formed by one-electron reduction of the ester carbonyl group have been exploited in intramolecular additions to alkenes.