Palladium-catalyzed oxidation of 5-substituted 1,3-cyclohexadienes carrying a nucleophilic group in the side chain employing O-2-DMSO as the oxidant gave cyclization via 1,4-addition to the 1,3-diene. The nucleophilic groups employed were tosylamido and carboxy. In the reaction Pd-II is most likely reduced to colloidal Pd-0 which is subsequently reoxidized by O-2. The solvent DMSO prevents precipitation of metallic palladium by coordination to the colloidal particles. The stereochemistry of the palladium-catalyzed intramolecular 1,4-oxidation was controlled to some extent by the nature of the external nucleophile. Thus, in the intramolecular 1,4-oxyacyloxylation of 1 (hydroxy as nucleophile in the side chain) it was possible to direct the 1,4-addition towards cis or trans stereochemistry by variation of the external carboxylate nucleophile.