The telomerization of butadiene with water in the presence of heterogeneous palladium catalysts was investigated. Among various heterogeneous palladium catalysts, palladium anchored on montmorillonite showed good activity and selectivity to octadienol comparable to those of a homogeneous palladium acetate catalyst. The palladium catalyst anchored on montmorillonite could be recycled with no loss in activity and selectivity.