The benzilic acid rearrangement is formally the 1,2-rearrangement of 1,2-diketones to form α-hydroxy–carboxylic acids using a base. This reaction receives its name from the reaction of benzil with potassium hydroxide to form benzilic acid. First performed by Justus von Liebig in 1838, it is the first reported example of a rearrangement reaction. It has become a classic reaction in organic synthesis and has been reviewed many times before. It can be viewed as an intramolecular redox reaction, as one carbon center is oxidized while the other is reduced.

The reaction has been shown to work in aromatic, semi-aromatic, aliphatic, and heterocyclic substrates. The reaction works best when the ketone functional groups have no adjacent enolizable protons, as this allows aldol condensation to compete. The reaction is formally a ring contraction when used on cyclic diketones. It has been found that aryl groups more readily migrate than alkyl groups, and that aryl groups with electron-withdrawing groups migrate the fastest.