A process for the direct oxidation of methane to C1-oxygenates (formaldehyde and methanol) has been developed. The process involves a gas stream, comprising methane, an oxidizing agent (such as air, or oxygen blended with an inert diluent), and a nitrogen oxide as a gas phase sensitizer at oxidation conditions to produce C1-oxygenates, such as formaldehyde and methanol. A certain proportion of nitrogen oxide, which acts as a radical initiator, in the stream is crucial to achieve a high yield of formaldehyde and methanol. In addition, the temperature plays an important role in the conversion of methane and in the selectivity to C1-oxygenates.