The excellent catalytic performance of phosphate-vanadium impregnated silica-titania aerogel as a bifunctional oxidative and acidic catalyst was evaluated in consecutive transformation of 1-octene to 1,2-octanediol through formation of 1,2-epoxyoctane using aqueous H2O2. Phosphate group and vanadium were impregnated onto silica-titania aerogel via wet impregnation method at room temperature, followed by a high calcination temperature. Significant increase of hydrated, tetrahedrally coordinated Ti species was found in phosphate-vanadium impregnated silica-titania sample. Pyridine adsorption study revealed that the combination of phosphate group and vanadium is essential for generation of Bronsted acidic sites. Phosphate-vanadium impregnated silica-titania catalyst produced 1,2-octanediol (275 mu mol) with selectivity of 65%. In contrast, no noticeable diol was produced when silica-titania aerogel and phosphate treated silica-titania sample were used.