A new process for acetic acid production by direct oxidation of ethylene which was established and commercialized is described. The catalyst system consisting of Pd and heteropoly acid exhibits excellent activity and selectivity. The addition of Se or Te to the catalyst system is effective to suppress the formation of carbon dioxide. This new process is applicable to a plant of a wide range of size corresponding to the local demand. Because this new process produces little waste water, it is very friendly to the environment.