The effects of reaction variables on the reactions of butadiene with water in the presence of homogeneous palladium catalysts were investigated. The reactions in the presence of palladium, a phosphine ligand and carbon dioxide comprized telomerization, linear dimerization and cyclodimerization. The rate of reaction and the selectivity to 2,7-octadien-1-ol, 1,3,7-octatriene and 1-methylene 2-vinyl cyclopentane depended strongly upon the ratio of water to butadiene, the ratio of phosphine to palladium, the amount of carbon dioxide and the reaction time. 2,7-Octadien-1-ol that formed initially was subsequently converted to a mixture of 1,7-octadien-3-ol, 1,3,7-octatriene and 1-methylene-2-vinyl cyclopentane, the degree of which depended on the reaction conditions, A possible reaction pathway for the reaction of butadiene with water has been proposed.