Liquid processing of layered transition metal dichalcogenides (LTMDs) is enabling a variety of applications, ranging from catalysts and coatings, to electronics, flexible sensors, and optical filters. Current strategies, such as sonication or shear mixing, are challenged by small yields (<1%), low production rates (<mg/min), short-term oxidative stability, and low dispersion concentration in a limited number of solvents. These factors inhibit the transition from lab to bulk production. Here, we establish the mechanism for the liquid processing route of Redox Exfoliation and establish the roles that chemical species formed in situ play in the exfoliation process of LTMDs. The mechanism proceeds via surface adsorption of polyoxometalate macroanions (POMs) and can be optimized by controlling the formation rate and size of these POMs through reagent level stoichiometric parametrization. Based on this mechanism, few-to-monolayer yields for MoX2 (X = S, Se, Te) may exceed 10% of the starting LTMD powder, and delamination may be reinitiated after reagent depletion, minimizing the starting LTMD waste.