Gas-phase oxidation of benzene using a mixture of oxygen and hydrogen has been carried out on silica-supported vanadium oxide catalysts modified with platinum or palladium. Catalyst activity and phenol selectivity were studied as a function of the precious metal used, the vanadium oxide loading as well as of temperature. The binary catalysts have been characterized by TPR and TEM. Pt-VOx/SiO2 catalysts were more active than Pd-VOx/SiO2 catalysts. By using platinum catalysts benzene conversion amounted to 1.0% (S-phenol = 97%) at 413 K, whereas palladium catalysts reached a conversion of only 0.2% (Sphenol = 86%) for the same contact time and temperature. The most active catalyst for the oxidation of benzene to phenol was a low vanadium loaded 0.5 wt.% Pt-3 wt.% V on silica catalyst. At temperatures above 413 K phenol selectivity decreased strongly because of enhanced total oxidation. Active catalysts need both components: a dispersed transition metal oxide such as VOx as well as small precious metal particles such as platinum. The activity of the catalysts arises from a close interaction between the redox-active compound VOx and the electron mediator and hydrogen activator platinum as was confirmed by correlation of catalytic results and catalyst properties. Highly dispersed platinum particles are exclusively located on the vanadium oxide covered surface as demonstrated by TEM investigations. TPR studies showed and enhanced reducibility of a part of vanadium(V) oxide indication a close neighborhood of VOx and platinum.