Renewable chemical production from biomass is desirable for the sustainable development of the society. Levulinic acid (LA) is a common biomass-derived building block that furnishes a suitable source to produce the industrially valuable γ-valerolactone (GVL). In this work, a low-cost, green and effective catalytic system was developed to transform LA into GVL in water by using Fe and Ni, in which the hydrogen source was provided by water splitting. The Fe primarily functioned as the reductant that transformed into Fe3O4 species after the reaction, while Ni played the major catalytic role to promote selective LA hydrogenation into GVL. After optimizations, the GVL yield reached the highest of 99% within 2-3 h at relatively low hydrothermal temperature of 230-250 °C. The recycling tests of Ni has suggested negligible decrease of product yield after four runs. This study establishes a green, facile and eco-friendly approach to synthesize GVL from biomass-derived LA.