The present invention relates to compositions and methods for achieving the efficient allylic oxidation of organic molecules, especially olefins and steroids, under aqueous conditions. The invention concerns the use of dirhodium (II,II) "paddlewheel complexes, and in particular, dirhodium carboximate and tert-butyl hydroperoxide as catalysts for the reaction. The use of aqueous conditions is particularly advantageous in the allylic oxidation of 7-keto steroids, which could not be effectively oxidized using anhydrous methods, and in extending allylic oxidation to enamides and enol ethers.