Direct oxidation of methane to valuable oxygenates like alcohols and acetic acid under mild conditions poses a significant challenge due to high C-H bond dissociation energy, facile overoxidation to CO and CO2 and the intricacy of C-H activation/C-C coupling. In this work, we develop a multifunctional iron(III) dihydroxyl catalytic species immobilized within a metal-organic framework (MOF) for selective methane oxidation into methanol or acetic acid at different reaction conditions using O2. The active-site isolation of monomeric FeIII(OH)2 species at the MOF nodes, their confinement within the porous framework, and their electron-deficient nature facilitate chemoselective C-H oxidation, yielding methanol or acetic acid with high productivities of 38,592 mu molCH3OHgFe-1h-1\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$38,592\,\upmu {{{\rm{mol}}}}_{{{{\rm{CH}}}}_{3}{{\rm{OH}}}}{{{{\rm{g}}}}_{{{\rm{Fe}}}}}<^>{-1}{{{\rm{h}}}}<^>{-1}$$\end{document} and 81,043 mu molCH3CO2HgFe-1h-1\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$81,043\,\upmu {{{\rm{mol}}}}_{{{{\rm{CH}}}}_{3}{{{\rm{CO}}}}_{2}{{\rm{H}}}}{{{{\rm{g}}}}_{{{\rm{Fe}}}}}<^>{-1}{{{\rm{h}}}}<^>{-1}$$\end{document}, respectively. Experiments and theoretical calculations suggest that methanol formation occurs via a FeIII-FeI-FeIII catalytic cycle, whereas CH3CO2H is produced via hydrocarboxylation of in-situ generated CH3OH with CO2 and H2, and direct CH4 carboxylation with CO2. The development of catalytic technology for direct oxidation of methane into value-added products is highly lucrative. Here, a metal-organic framework supported mono iron(III)-dihydroxyl catalyst selectively oxidizes methane into methanol or acetic acid using only oxygen, where acetic acid formation occurs via in-situ methane carboxylation and methanol hydrocarboxylation.