Diethanolamine was oxidized by gaseous oxygen to N-(2-hydroxyethyl) glycine in an aqueous solution containing sodium hydroxide over a 0.5% Pd-alumina catalyst in the temperature range of 50-80°C and at ambient pressure in a slurry reactor, and the kinetics was investigated. Under the present experimental conditions, all mass transfer resistances were assumed to be insignificant. The catalyst was very active but its activity decreased rapidly while it was in contact with oxygen. A power-law model was assumed for this reaction. The reaction order was estimated to be 0.37 with respect to diethanolamine concentration and 0.64 with respect to oxygen concentration. The rate was analyzed according to the Hougen-Watson model. It is concluded that the oxidation is mainly controlled by the surface reaction between adsorbed diethanolamine and oxygen in the liquid phase. This reaction is an excellent model for studies of three-phase reaction systems (gas-liquid-solid).