The highly chemo-, regio-, and diastereoselective and stereospecific epoxidation of various allylic alcohols with only one equivalent of hydrogen peroxide in water can be efficiently catalyzed by the dinuclear peroxotungstate, K2[[W(=O)(O2)2(H2O)]2(mu-O)].2H2O (I). The catalyst is easily recycled while maintaining its catalytic performance. The catalytic reaction mechanism including the exchange of the water ligand to form the tungsten-alcoholate species followed by the insertion of oxygen to the carbon-carbon double bond, and the regeneration of the dinuclear peroxotungstate with hydrogen peroxide is proposed. The reaction rate shows first-order dependence on the concentrations of allylic alcohol and dinuclear peroxotungstate and zero-order dependence on the concentration of hydrogen peroxide. These results, the kinetic data, the comparison of the catalytic rates with those for the stoichiometric reactions, and kinetic isotope effects indicate that the oxygen transfer from a dinuclear peroxotungstate to the double bond is the rate-limiting step for terminal allylic alcohols such as 2-propen-1-ol (1a).