Alkylarenes were catalytically and selectively oxidized to the corresponding benzylic acetates and carbonyl products by nitrate salts in acetic acid in the presence of Keggin type molybdenum-based heteropolyacids, H3+xPVxMo12-xO40 (x = 0-2). H5PV2Mo10O40 was especially effective. For methylarenes there was no over-oxidation to the carboxylic acid contrary to what was observed for nitric acid as oxidant. The conversion to the aldehyde/ketone could be increased by the addition of water to the reaction mixture. As evidenced by IR and N-15 NMR spectroscopy, initially the nitrate salt reacted with H5PV2MO10O40 to yield a (NO2+)-O-V[H4PV2Mo10O40] intermediate. In an electron-transfer reaction, the proposed (NO2+)-O-V[H4PV2Mo10O40] complex reacts with the alkylarene substrate to yield a radical-cation-based donor-acceptor intermediate, (NO2)-O-IV[H4PV2Mo10O40]-ArCH2R+.. Concurrent proton transfer yields an alkylarene radical, ArCHR., and NO2. Alternatively, it is possible that the (NO2+)-O-V[H4PV2Mo10O40] complex abstracts a hydrogen atom from alkylarene substrate to directly yield ArCHR. and NO2. The electron transfer-proton transfer and hydrogen abstraction scenarios are supported by the correlation of the reaction rate with the ionization potential and the bond dissociation energy at the benzylic positions of the alkylarene, respectively, the high kinetic isotope effect determined for substrates deuterated at the benzylic position, and the reaction order in the catalyst. Product selectivity in the oxidation of phenylcyclopropane tends to support the electron transfer-proton transfer pathway. The ArCHR. and NO2 radical species undergo heterocoupling to yield a benzylic nitrite, which undergoes hydrolysis or acetolysis and subsequent reactions to yield benzylic acetates and corresponding aldehydes or ketones as final products.