Olefin isomerization of allylic ethers and alcohols is catalyzed by Ru(II)(H2O)6(tos)2 (tos = p-toluenesulfonate) (1) under mild conditions in aqueous solution to yield the corresponding carbonyl compounds. Non-allylic olefins are also isomerized, although homoallylic alcohols exhibit stability toward isomerization. An exclusive 1,3-hydrogen shift is observed in the isomerization of allyl-l,l-d2 alcohol to propionaldehyde-1,3-d2 and allyl-l,l-d2 methyl ether to 1-propenyl-1,3-d2 methyl ether by 1 in aqueous solution. The presence of crossover products from the isomerizations of mixtures of (a) allyl-3-C-13 alcohol and allyl-l,l-d2 alcohol and (b) allyl-l,l-d2 methyl ether and allyl ethyl ether demonstrates that the isomerization of both alcohols and ethers occurs via intermolecular hydrogen shifts. A modified metal hydride addition-elimination mechanism involving exclusive Markovnikov addition to the double bond directed by the oxygen functionality of the substrate has been proposed.