An efficient palladium(II)-catalyzed oxidative carbohydroxylation of allene-substituted conjugated dienes in aqueous media has been developed. The reaction is conducted employing p -benzoquinone as the stoichiometric reoxidant for the palladium or under aerobic conditions with essentially the same outcome. It is worth mentioning that this is the first example of a palladium(II)-catalyzed oxidation where a carbon-carbon bond is formed in water and also one of the few cases of nucleophilic attack by water on a (pi-allyl)palladium complex.