A versatile and highly efficient method for the direct synthesis of α-keto esters and 1,2-diketones has been developed. This approach utilizes the oxidative cleavage of a variety of β-keto esters and 1,3-diketones mediated by an Oxone/aluminum trichloride system. The simple one-step oxidation reaction proceeded selectively in aqueous media to afford products in high yields, short reaction times, and environmentally benign conditions.