The catalytic oxidation of triphenylphosphine in the presence of dioxygen by the diiron(II) complex [Fe(2)(micro-O(2)CAr(Tol))(2)(Me(3)TACN)(2)(MeCN)(2)](OTf)(2) (1), where (-)O(2)CAr(Tol) = 2,6-di(p-tolyl)benzoate and Me(3)TACN = 1,4,7-trimethyl-1,4,7-triazacyclononane, has been investigated. The corresponding diiron(III) complex, [Fe(2)(micro-O)(micro-O(2)CAr(Tol))(2)(Me(3)TACN)(2)](OTf)(2) (2), the only detectable iron-containing species during the course of the reaction, can itself promote the reaction. Phosphine oxidation is coupled to the catalytic oxidation of THF solvent to afford, selectively, the C-C bond-cleavage product 3-hydroxypropylformate, an unprecedented transformation. After consumption of the phosphine, solvent oxidation continues but results in the products 2-hydroperoxytetrahydrofuran, butyrolactone, and butyrolactol. The similarities of the reaction pathways observed in the presence and absence of catalyst, as well as (18)O labeling, solvent dependence, and radical probe experiments, provide evidence that the oxidation is initiated by a metal-centered H-atom abstraction from THF. A mechanism for catalysis is proposed that accounts for the coupled oxidation of the phosphine and the THF ring-opening reaction.