The direct liquid‐phase oxidative C─H functionalization of hydrocarbons using molecular oxygen represents an attractive sustainable approach for ketone synthesis, offering advantages in atom economy and environmental compatibility. However, existing catalytic systems often require harsh conditions or suffer from overoxidation issues, limiting their practical applicability. Herein, a highly efficient and selective catalytic system is reported for benzylic C─H oxidation of alkyl aromatics under exceptionally mild conditions, employing a synergistic combination of trivalent cobalt acetylacetonate [Co(acac) 3 ] and N‐hydroxyphthalimide (NHPI) in neutral media. This catalytic protocol achieves outstanding ketone yields up to 99% with >99% selectivity at 70 °C under atmospheric oxygen pressure. The system demonstrates remarkable substrate scope tolerance, accommodating various functional groups while maintaining excellent efficiency (up to 99% conversion and selectivity). Notably, the methodology has been successfully scaled to multigram production of acetophenone without compromising yield and selectivity. Comprehensive mechanistic studies, including 18 O 2 isotopic labeling experiment, unequivocally establish a two‐step reaction pathway proceeding through a 1‐phenylethanol intermediate. This work provides significant advances in sustainable oxidation catalysis by combining operational simplicity with exceptional selectivity under mild conditions, offering promising potential for industrial implementation.