We report the palladium(II)-catalyzed transfer hydration of cyanohydrins to alpha-hydroxyamides by using carboxamides as water donors. This method enables selective hydration of various aldehyde- and ketone-derived cyanohydrins to afford a alpha-mono- and alpha,alpha-disubstituted-alpha-hydroxyamides, respectively, under mild conditions (50 degrees C, 10 min). The direct conversion of fenofibrate, a drug bearing a benzophenone moiety, into a functionalized alpha,alpha-diaryl-alpha-hydroxyamide was achieved by means of a hydrocyanation transfer hydration sequence. Preliminary kinetic studies and the synthesis of a site specifically O-18-labeled alpha-hydroxyamide demonstrated the carbonyl oxygen transfer from the carboxamide reagent into the alpha-hydroxyamide product.