[reaction: see text] Dirhodium caprolactamate [Rh2(cap)4] is an effective catalyst for benzylic oxidation with tert-butyl hydroperoxide (TBHP) under mild conditions. Sodium bicarbonate is the optimal base additive for substrate conversion. Benzylic carbonyl compounds are readily obtained, and a formal synthesis of palmarumycin CP2 using this methodology is described.