Allylic C H acetoxylations are among the most widely studied palladium(II)-catalyzed C-H oxidation reactions. While the principal reaction steps are well established, key features of the catalytic mechanisms are poorly characterized, including the identity of the turnover-limiting step and the catalyst resting state. Here, we report a mechanistic study of aerobic allylic acetoxylation of allylbenzene with a catalyst system composed of Pd(OAc)(2) and 4,5-diazafluoren-9-one (DAF). The DAF ligand is unique in its ability to support aerobic catalytic turnover, even in the absence of benzoquinone or other co-catalysts. Herein, we describe operando spectroscopic analysis of the catalytic reaction using X-ray absorption and NMR spectroscopic methods that allow direct observation of the formation and decay of a palladium(I) species during the reaction. Kinetic studies reveal the presence of two distinct kinetic phases: (1) a burst phase, involving rapid formation of the allylic acetoxylation product and formation of the dimeric Pd-1 complex [Pd-1(DAF)(OAc)](2), followed by (2) a post-burst phase that coincides with evolution of the catalyst resting state from the Pd-I dimer into a pi-allyl-Pd-II species. The data provide unprecedented insights into the role of ancillary ligands in supporting catalytic turnover with O-2 as the stoichiometric oxidant and establish an important foundation for the development of improved catalysts for allylic oxidation reactions.