The Zr‐monosubstituted phosphotungstate (Bu4N)8[{PW11O39Zr(μ‐OH)(H2O)}2] (1) is a highly active and selective catalyst for thioether sulfoxidation with aqueous H2O2 in acetonitrile or acetonitrile/ethanol. The reaction proceeds unprecedentedly fast and completes within seconds at room temperature. Various sulfides produce corresponding sulfoxides with selectivity of 98–99 % and oxidant utilization efficiency of 92–99 %. The reaction mechanism was investigated using test substrates, kinetic, isotopic labeling, and spectroscopic tools. The oxidation of thianthrene‐5‐oxide and competitive sulfide‐sulfoxide oxidation point to an electrophilic oxidation mechanism, but a V‐shaped Hammett plot found for oxidation of p‐substituted thioanisoles may suggest a biphilic nature of active species. Kinetic studies revealed that the rate‐limiting step of the reaction is the interaction of a peroxo zirconium intermediate with organic substrates. ATR‐FT‐IR and 31P NMR spectroscopic studies coupled with stoichiometric experiments indicated that peroxo species capable of transferring an oxygen atom to thioethers are dimeric side‐on mono‐ and diperoxo complexes, [Zr2(μ‐η2 : η2‐O2){PW11O39}2(H2O)x]]8− (I) and [{Zr(μ‐η2‐O2)}2(PW11O39)2(H2O)y]10− (II), and monomeric Zr‐hydroperoxo [Zr(η2‐OOH)PW11O39]4− (III) and peroxo [Zr(η2‐O2)PW11O39]5− (IV) species, which dominate at high excess of H2O2. While I and III are endowed with electrophilic oxygen, which can be transferred to electron‐rich sulfides, more negatively charged II and IV preferably react with thioethers comprising electron‐withdrawing substituents.