Molecular oxygen (O2) remains to be an ideal yet underutilized feedstock for the oxidative transformation of organic substrates and renewable energy systems such as fuel cells. Palladium (Pd) has shown particular promise in enabling these applications. The present study describes a Pd-mediated O2 reduction to water via C-H activation of 9,10-dihydroanthracene (DHA) by a Pd(II) η2-peroxo complex 1O2. The reaction yields stoichiometric anthracene and Pd(0) product 1 and is notable in two respects. First, plots of concentrations of the reaction participants over time have distinctly sigmoidal shapes, indicating that conversion accelerates over time and implying autocatalysis. Second, the reaction proceeds via a genuine monometallic Pd(II) dihydroxide 1(OH)2 directly observed to grow and decay as an intermediate. Confirming its role as an intermediate, the dihydroxide 1(OH)2 was found to mediate C-H oxidation of DHA on par in activity with the peroxo compound 1O2. Mechanistic studies with density functional theory (DFT) calculations suggested that both 1O2 and 1(OH)2 react with DHA by hydrogen atom transfer (HAT) and that autocatalysis in the 1O2 reaction results from oxidative addition of the initial Pd(II) complex 1O2 to the Pd(0) product 1. This reaction forms a transient bis(μ-oxo) Pd(II) dimer 1O21 that is more active in the HAT oxidation of DHA than the initial 1O2.