A general method for the vicinal dioxygenation of olefins was developed using cationic Pd diphosphine complexes as the catalysts and Phl(OAC)(2) as the terminal oxidant. In comparison to known Pd-catalyzed vicinal oxidations, this method is suitable for a broad range of olefins in both inter- and intramolecular reactions. An (18)O-labeling experiment provides insight into the mechanism of this transformation which presumably involves Pd(II)/Pd(IV) intermediates.