Cost-effective removal of refractory sulfur-containing compounds from oils is still a challenge. In this paper, a novel catalyst of molybdenum supported on Ti-pillared interlayer clay (Ti-PILC) was successfully prepared which performed well in oxidative desulfurization (ODS) with cyclohexanone peroxide (CYHPO) as oxidant under mild conditions. Performance of catalytic oxidation and removal of oxidation product were also studied. The oxidation rate of dibenzothiophene (DBT) reached 99.90% under the optimum reaction conditions. Mo/Ti-PILC catalyst showed higher activity than Mo/Na-MMT in ODS not only due to the pillared interlayer structure which contributed to better molybdenum dispersion and faster diffusion of reactants, but also the catalytic activity of titanium in the oxidative desulfurization of DBT. Oxidative product of sulfone which appeared as crystal in the model oil was filtered and sulfur concentration was reduced to below 10 mg/L. Catalytic activity would be almost unaffected after regenerating for 9 times, and the leaching of active species did not appear in the leaching experiment of the catalyst, which proved that it was real heterogeneous catalysis. Besides, kinetics data conformed to the pseudo-first-order equation pretty well. These results indicated that this desulfurization system was cost-effective for the removal of DBT from oils.