Dehydroxylated ZSM-5 type zeolites are used for selective oxidation of aromatic compounds, including benzene, chlorobenzene, styrene, difluorobenzenes, phenol, alkylbenzenes into corresponding phenols and diphenols using nitrous oxide as a mild oxidant. In the case of benzene, the yield of phenol reaches 70-80%. Extremely high selectivity (similar to 98-100%) in the case of benzene and similar to 85% in the case of difluorobenzenes and high regioselectivities are observed on the dehydroxylated HZSM-5 zeolite. The active sites are shown to be the strong Lewis acid-base pair sites formed upon dehydroxylation of the zeolites. The reaction mechanism that is alternative to the proposed iron-mediated mechanism is discussed.