Hydrophilic catalysts supported by water-soluble ligands are attractive homogeneous catalysts because the aqueous catalyst solution can be easily separated from the organic product stream. In addition, water is an attractive solvent since it is non-toxic, nonflammable, inexpensive, and renewable. We have synthesized sterically demanding water-soluble alkyl- and arylphosphines, such as t-Bu-Amphos and TXPTS. These ligands give active catalysts for palladium- and rhodium-catalyzed coupling reactions under mild conditions. In this talk, we will discuss the steric and electronic properties of these ligands and their coordination chemistry with palladium. Our results have shown that the steric properties of the ligands are most predictive of catalyst activity in palladium-catalyzed cross-coupling reactions of aryl bromides. The steric bulk of the ligand also directly affects the ability of these ligands to generate the catalytically active species.