A novel water soluble phosphine, N,N-dipolyoxyethylene-substituted-2-(diphenylphosphino)phenylamine (PEO-DPPPA), was synthesized by a two-step ethoxylation of 2-(diphenylphosphino)phenylamine (2-Ph 2 P-C 6 H 4 NH 2 , DPPPA). In the first step, DPPPA was ethoxylated without catalyst to give an intermediate with an average polyethylene glycol (PEG) chain length (L = m + n) of 3. Thereafter, this intermediate was further ethoxylated by using KOH as a catalyst to obtain the products with needed values of L. The solubility of the products in water increases with increasing of L. When L is more than 35, the products are water-soluble and possess the property of inverse temperature-dependent solubility in water (cloud point, C p ) as nonionic surfactants. The PEO-DPPPA/Rh complex catalyst formed in situ by RhCl 3 •3H 2 O and PEO-DPPPA (L = 45) has been applied to the aqueous-organic biphasic hydroformylation of 1-decene. The conversion of olefin and the yield of aldehyde are 99.5 and 99.0%, respectively, under the conditions of 120 • C, 5.0 MPa (CO/H 2 = 1), P/Rh = 4 (molar ratio), 1-decene/Rh = 1000 (molar ratio) and 5 h. Recycling test shows that both the conversion of olefin and the yield of aldehyde are still higher than 94.0% even after the catalyst has been recycled 20 times. The high reactivity of PEO-DPPPA/Rh complex can be attributed to a process termed thermoregulated phase transfer catalysis.