A new ruthenium polypyridyl complex, [Ru(bpy)2(acpy)]+ (acpy = 2-pyridylacetate, bpy = 2,2'-bipyridine), was synthesized and fully characterized. Distinct from the previously reported analog, [Ru(bpy)2(pic)]+ (pic = 2-pyridylcarboxylate), the new complex is unstable under aerobic conditions and undergoes oxidation to yield the corresponding α-keto-2-pyridyl-acetate (acpyoxi) coordinated to the RuII center. The reaction is one of the few examples of C-H activation at mild conditions using O2 as the primary oxidant and can provide mechanistic insights with important implications for catalysis. Theoretical and experimental investigations of this aerobic oxidative transformation indicate that it takes place in two steps, first producing the α-hydroxo-2-pyridyl-acetate analog and then the final product. The observed rate constant for the first oxidation was in the order of 10-2 h-1. The reaction is hindered in the presence of coordinating solvents indicating the role of the metal center in the process. Theoretical calculations at the M06-L level of theory were performed for multiple reaction pathways in order to gain insights into the most probable mechanism. Our results indicate that O2 binding to [Ru(bpy)2(acpy)]+ is favored by the relative instability of the six-ring chelate formed by the acpy ligand and the resulting RuIII-OO˙- superoxo is stabilized by the carboxylate group in the coordination sphere. C-H activation by this species involves high activation free energies (ΔG‡ = 41.1 kcal mol-1), thus the formation of a diruthenium μ-peroxo intermediate, [(RuIII(bpy)2(O-acpy))2O2]2+via interaction of a second [Ru(bpy)2(acpy)]+ was examined as an alternative pathway. The dimer yields two RuIVO centers with a low ΔG‡ of 2.3 kcal mol-1. The resulting RuIVO species can activate C-H bonds in acpy (ΔG‡ = 23.1 kcal mol-1) to produce the coordinated α-hydroxo-2-pyridylacetate. Further oxidation of this intermediate leads to the α-keto-2-pyridyl-acetate product. The findings provide new insights into the mechanism of C-H activation catalyzed by transition-metal complexes using O2 as the sole oxygen source.