1-(4-Isobutylphenyl)ethanol (IBPE) was carbonylated to 2-(4-isobutylphenyl)propionic acid (ibuprofen) in an aqueous/organic two phase system using the water-soluble Pd(tppts)(3) catalyst [tppts = P(C6H4-m-SO3Na)(3)] in the presence of p-CH3C6H4SO3H at 363 K, 15 MPa CO pressure and a palladium concentration of 150 ppm without addition of organic solvents. Under these conditions the conversion of IBPE was 83% and the selectivity to ibuprofen 82% with no decomposition of the Pd(tppts)(3) catalyst. Both the activity and selectivity were strongly influenced by the tppts/Pd molar ratio and the nature of the added Bronsted acid. Maximum efficiency was observed for P/Pd = 10. Acids of weakly or non-coordinating anions, such as p-CH3C6H4SO3H, CF3COOH or HPF6 afforded carbonylation. No catalytic activity was observed in the presence of acids of strongly coordinating anions, such as HI. The water-soluble Pd/dppps catalyst [dppps = Ar2-nPhnP-(CH2)(3)-PPhnAr2-n; Ar = C6H4-m-SO3Na; n = n = 0 : 86% and n = 0, n = 1 : 14%] exhibited low catalytic activity and the major product obtained was the linear isomer of ibuprofen, 3-(4-isobutylphenyl) propionic acid (3-IPPA) with selectivities up to 78%. Replacement of tppts by a ligand containing less -SO3Na groups such as monosulphonated triphenylphosphine (tppms) gives rise to a dramatic drop in the catalytic activity and selectivity to ibuprofen. No catalytic activity was observed using palladium catalysts modified with 2-pyridyldiphenylphosphine (PyPPh2) and tris(2-pyridyl) phosphine (PPy3) which are both water soluble in their protonated form. A catalytic cycle is proposed to explain the observed results.