Bound-state spectra of shifted Deng-Fan oscillator potential are studied by means of a generalized pseudospectral method. Very accurate results are obtained for both low as well as high states by a non-uniform optimal discretization of the radial Schrödinger equation. Excellent agreement with literature data is observed in both s-wave and rotational states. Detailed variation of energies with respect to potential parameters is discussed. Application is made to the ro-vibrational levels of four representative diatomic molecules (H 2 , LiH, HCl, CO). Nine states having {n, ℓ} = 0, 1, 2 are calculated with good accuracy along with 15 other higher states for each of these molecules.Variation of energies with respect to state indices n, ℓ show behavior similar to that in the Morse potential. Many new states are reported here for the first time. In short, a simple, accurate and efficient method is presented for this and other similar potentials in molecular physics. *