Catalyst systems consisting of a palladium(II) diphosphine complex with weakly or non-coordinating counterions are efficient catalysts for the hydrocarbonylation of both aliphatic and functionalized olefins. Moreover, variations of ligand, anion and/or solvent can be used to steer the reaction towards alcohols, aldehydes, ketones or oligoketones. Non-coordinating anions and arylphosphine ligands produce primarily (oligo)ketones; increasing ligand basicity or anion coordination strength shifts selectivity towards aldehydes and alcohols. For the mechanisms of the aldehyde-producing step, we propose heterolytic dihydrogen cleavage, assisted by the anion. At high electrophilicity of the palladium center, selective ketone formation is observed. The reactions described here constitute the first examples of selective formation of ketones by hydrocarbonylation of higher olefins. (C) 2000 Elsevier Science S.A. All rights reserved.