Herein, we report the first example of Cu-promoted β ipso-hydroxylation of substituted benzophenones using a bidentate directing group (DG) and H2O2 as an oxidant. In addition to the new C-O bond formed, the ipso-oxidation induces a very unusual 1,2-rearrangement of the iminyl group to the vicinal γ position. This transformation is highly dependent on the substrate utilized (favored for 4-methoxy-substituted benzophenones) and on the DG used (2-picolylamine leads to selective γ-C-H functionalization, while β ipso-oxidation requires 2-(2-aminoethyl)pyridine). An analysis of the oxidation of substrate-ligands derived from 2-(2-aminoethyl)pyridine and unsymmetrical 4-MeO-substituted benzophenones indicates high regioselectivity (up to 89:11 for the MeO-substituted arene ring and up to 92:8 for β ipso- vs γ-C-H hydroxylation). Mechanistic studies (which include spectroscopic characterization of reaction intermediates, kinetics, and calculations) suggest the formation of a mononuclear CuIIOOH species before the rate-determining step (rds) of the reaction. DFT calculations suggest that the γ-C-H hydroxylation pathway involves a one-step concerted O-O cleavage and electrophilic aromatic attack. Conversely, β ipso-hydroxylation occurs in a stepwise fashion, in which O-O bond cleavage produces a CuIII(O·)(OH) before electrophilic aromatic attack. Calculations also shed light on the mechanism of the 1,2-rearrangement step, which involves strain release from a spiro 5-membered to a 6-membered Cu chelate.