A methodology is introduced to separate polar reaction products from ionic liquids without the need for organic solvent extraction or distillation. We investigated product isolation after an alcohol oxidation performed in ionic liquids. Suitable ionic liquids were selected based on their mixing or demixing with a range of alcohols and the derived ketones. The aim was to obtain complete miscibility with the alcohol substrate at reaction temperature and a clear phase separation of the derived ketone product at room temperature. Six imidazolium based ionic liquids displayed this desired behaviour and were sufficiently stable to oxidation. These ionic liquids were then employed in the oxidation of non-activated aliphatic alcohols with molecular oxygen in the presence of palladium(II) acetate. In 1-butyl-3-methylimidazolium tetrafluoroborate, 2-ketone yields of 79 and 86% were obtained for, respectively, 2-octanol and 2-decanol. After cooling to room temperature the ionic liquid expels the immiscible ketone and the product phase can be isolated by decantation. In addition, the ionic liquid acts as an immobilization medium for the palladium catalyst, allowing efficient catalyst recycling.