Oxidation reactions by molecular oxygen (O-2) over palladium (Pd)-based nanomaterials are a series of processes crucial to the synthesis of fine chemicals. In the past decades, investigations of related catalytic materials have mainly been focused on the synthesis of Pd-based nanomaterials from the angle of tailoring their surface structures, compositions and supporting materials, in efforts to improve their activities in organic reactions. From the perspective of rational materials design, it is imperative to address the fundamental issues associated with catalyst performance, one of which should be oxygen activation by Pd-based nanomaterials. Here, the fundamentals that account for the transformation from O-2 to reactive oxygen species over Pd, with a focus on singlet O-2 and its analogue, are introduced. Methods for detecting and differentiating species are also presented to facilitate future fundamental research. Key factors for tuning the oxygen activation efficiencies of catalytic materials are then outlined, and recent developments in Pd-catalyzed oxygen-related organic reactions are summarized in alignment with each key factor. To close, we discuss the challenges and opportunities for photocatalysis research at this unique intersection as well as the potential impact on other research fields.