Controlled oxidation reactions of hydrocarbons are practiced today in fixed-bed, fluid bed or transport bed reactors with oxygen or air as the oxidant. In fixed-bed reactors, due to the exothermicity of the oxidation reactions, heat removal and temperature control are critical in achieving safe and optimum reaction conditions that maximize conversion and selectivity. Industrial reactors often control hot spot formation by using an appropriate diluent (ballast) gas. Steam, nitrogen, methane and carbon dioxide are the most commonly used ballast gases. The scope of this paper is to elucidate the benefits of ballast gas use as a tool to optimize heat transfer and reduce the hot spot effect in controlled oxidations with fixed-bed reactors. Ballast gas does not participate in the reaction, but it is used to control heat removal and flammability. A homogeneous one-dimensional reactor model was used to study and compare two oxidation processes: (I) ethylene oxidation to ethylene oxide and (2) o-xylene oxidation to phthalic anhydride. For both processes hot spot temperature and conversion decreased as methane replaced nitrogen in the process ballast gas. Selectivity increased in the ethylene oxide case but decreased in the phthalic anhydride case, indicating that ballast gas effect on selectivity depends on the reaction mechanism. Thus, there is an optimum ballast gas composition that will optimize hot spot temperature and reactor yield.