Ti-MCM-41 supported vanadia core-shell catalysts were prepared and their catalytic activity was evaluated in a biphasic reactor for simultaneous oxidation/separation of refractory organosulfur compounds (dibenzothiophene (DBT), 4-methyldibenzothiophene (4-MDBT), and 4,6-dimethyldibenzothiophene (4,6-DMDBT)) in a model diesel fuel. Formation of core-shell structure in the catalyst nanoparticles resulted from the surface diffusion of the vanadium ion in semimelted state of vanadia during the calcination process. It was found that both the value of V5+/(V4+ + V5+) and the surface acidity of the catalysts generally increased as the content of V content increased to 15 wt % of vanadium and correlated well with variations in catalytic activity, indicating that the surface V5+ and surface acid sites were chiefly responsible for the oxidation of sulfur compounds. The reactivity of organosulfur compounds was influenced by their steric hindrance. Addition of carboxylic acid (acetic acid or formic acid) promoted the sulfur oxidation efficiency via formation of more stable and active oxygen species like peroxometallic and superoxometallic species on the catalyst surface. Approximately 99% of the sulfur compounds were removed with the best catalysts containing 15 wt % V at a reaction temperature of 60 °C and within 60 min. This one-pot organosulfur oxidation and separation method was proven to be efficient, economical, and practical for deep desulfurization of diesel fuels containing refractory organosulfur compounds.