A critical step in the synthesis of the rare sugars, L-lyxose and L-ribose, from the corresponding D-sugars is the oxidation to the lactone. Instead of conventional oxidizing agents like bromine or pyridinium dichromate, it was found that a heterogeneous catalyst, Pd-Bi/C, could be used for the direct oxidation with molecular oxygen. The composition of the catalyst was optimized and the best results were obtained with 5 : 1 atomic ratio of Pd : Bi. The overall yields of the five-step procedure to L-ribose and L-lyxose were 47% and 50%, respectively. The synthetic procedure is advantageous from the viewpoint of overall yield, reduced number of steps, and mild reaction conditions. Furthermore, the heterogeneous oxidation catalyst can be easily separated from the reaction mixture and reused with no loss of activity.