The highly water-soluble phosphine ligands Na2O3PCH2CH2NH(CH2CH2O)(n)CH2CH2N(CH2PPh2)(2) (n = 1, 2,3) were prepared in 67-80% yields by the modified Mannich reaction using hydroxymethylphosphonium salts as the key materials under mild condition; the palladium(II) complexes of the ligands 3a-c with 2:1 or 4:1 -PPh2 to Pd2+ molar ratio were also prepared and characterized, and their catalytic activities were checked by carbonylation reaction of benzylchloride. XPS data showed that the coordination bonds were formed between phosphorous, nitrogen, oxygen and palladium atoms in the palladium complexes 4a-c. Good catalytic activities of the complexes 4a-c were observed in carbonylation reaction of benzylchloride with atmospheric CO. (C) 2002 Elsevier Science B.V. All rights reserved.