This chapter discusses recent developments regarding the synthesis, characterization and reactivity behavior of highly dispersed vanadium oxide catalysts. After a literature survey, the controlled synthesis of highly dispersed vanadium oxide catalysts based on grafting/ion-exchange is described in detail. A multiple in situ experimental setup combining Raman, UV-Vis and X-ray photoelectron spectroscopy is presented allowing for detailed characterization of the structure and dispersion of supported vanadium oxide catalysts. Emphasis is put on new insights regarding the structure and dispersion of vanadium oxide supported by mesoporous silica. The reactivity behavior of supported vanadium oxides in methanol-selective oxidation and propane oxidative dehydrogenation is briefly reviewed followed by a description of recent results from our own work.