Recent studies have highlighted the ability of Cu(II) to catalyze the aerobic oxidative functionalization of C-H bonds; however, very little is known about the mechanisms of these reactions. Here, we describe the Cu(II)-catalyzed C-H methoxylation and amidation of a macrocylic arene substrate with O(2) as the stoichiometric oxidant. Kinetic and in situ spectroscopic studies demonstrate the involvement of three different oxidation states of Cu in the catalytic mechanism, including an aryl-Cu(III) intermediate. These observations establish a novel mechanistic pathway that has implications for numerous other Cu-catalyzed aerobic oxidation reactions.