A chloride-free Pd(OAc)2/Cu(OAc)2 system catalyzes the oxidation of organic substrates by molecular oxygen in nonacidic methanol solutions. Terminal olefins, i.e., 1-hexene, 1-octene, styrene, and 2-vinylnaphthalene, give the corresponding methyl ketones without a significant double-bond isomerization of long-chain substrates. The catalyst also promotes an unusual allylic oxidation of sterically encumbered trisubstituted internal double bonds in acyclic polyenes able to form η2−η2-chelates with palladium. Linalool and nerolidol, mono- and sesquiterpenic allylic alcohols, give corresponding allylic ethers arising from the exclusive oxidation of the internal double bonds. Monosubstituted terminal double bonds in both substrates remain intact due to the deactivating effect of the allylic hydroxyl group. Dihydromyrcene, a nonfunctionalized monoterpenic diene, gives allylic ether and methyl ketone arising from the oxidation of both trisubstituted and terminal double bonds, respectively. On the other hand, internal double bonds in the substrates without a terminal olefinic bond, such as citronellol, citronellal, nerol, and citral, do not undergo oxidation under similar conditions. A steric possibility for chelation of the terminal and internal double bonds on the same palladium atom seems to be a crucial factor to determine the reactivity of the internal double bonds in these substrates toward oxidation. The presence of the second η2-coordinated double bond in these chelates favors the activation of the allylic C−H bond of the olefin, which results in η3-allyl intermediates and, then, in allylic ethers. Nerol, a primary allylic alcohol, is oxidized to (Z)-citral, although the process is complicated by further nonselective transformations of citral. All oxygenated terpenic derivatives obtained in the present work have a pleasant scent with a flower or fruit tinge and are potentially useful as components of synthetic perfumes.