The catalytic oxidative desulfurization (Cat-ODS) is a process comprises of catalyst, oxidant and solvent for extraction. In this research, new catalyst formulation of alumina supported polymolybdate based catalyst was investigated in this research. Experimentally, the obtained results revealed that, Fe/MoO3–PO4(10:90)/Al2O3 calcined at 500 °C was the best and potentially catalyst in this study. The catalyst was able to reduce sulfur levels in commercial diesel from about 440 ppmw to 17.6 ppmw with 96% of total sulfur removal. Highest catalytic activity showed that the presence of phosphorus and ferum can significantly improve the catalytic activity of the molybdenum oxide catalyst. Temperature programme desorption (TPD) analysis showed that the Fe/MoO3–PO4(10:90)/Al2O3 catalyst calcined at 500 °C was strong lewis acid. 31P NMR analysis showed the presence of different phosphate species as calcination temperature was increased. The catalyst with the best activity showed high surface area of 239 m2/g. The oxidation mechanism was studied in detail, and based on our results, the oxidation reactivity of different substrates was in the following order: DBT>4,6-DMDBT>Th.