In accordance with an embodiment, described herein is a system and method for transaction recovery in a multitenant application server environment. At least one resource manager associated with a partition can be designated as a determiner resource for that partition only, in order to support eliminating transaction logs (TLOG) in processing a two-phase commit transaction. A transaction manager can prepare all other resource managers in the mid-tier transactional system before the determiner resource. Furthermore, the transaction manager can rely on the list of outstanding transactions to be committed that is provided by the determiner resource for recovering the transaction. The transaction manager can commit an in-doubt transaction returned from a resource manager that matches the list of in-doubt transactions returned from the determiner resource. Otherwise, the transaction manager can roll back the in-doubt transaction.