The first unambiguous characterization of a stable dirhodium(III) paddlewheel complex 1 is reported. Complex 1 is prepared via the copper-catalyzed aerobic oxidation of 2 in 77% isolated yield. Comparison of the X-ray crystal structure, visible, and X-ray photoelectron spectroscopy of 1, 2, and 3 indicate a cleavage of the Rh-Rh bond in 1. The oxidation of 2 to 1 is proposed to occur through the intermediacy of 3 with the Cu(II)/Cu(I) couple with oxygen as a terminal oxidant and NaBPh4 as a phenyl transfer agent.