The concept of a large `natural' bite angle in chelating diphosphines has been extended to two-phase alkene hydroformylation by the use of a water-soluble diphosphine based on a xanthene-type backbone. The recently developed diphosphine Xantphos was modified with water-soluble groups by controlled sulfonation in fuming sulfuric acid to form 2,7-bis(SO 3Na)-4,5-bis(diphenylphosphino)-9,9-dimethylxanthene (2,7-bis(SO 3Na)-Xantphos) exclusively. The application of this ligand in the two-phase rhodium-catalyzed hydroformylation of alkenes led to the selective formation of linear aldehydes. Some data are reported on the hydroformylation of propene, hex-1-ene and 4-styrenesulfonate. Recycling experiments showed the catalyst to be active up to five cycles. For comparison, the two-phase catalytic results are also given with TPPTS as the ligand. Furthermore, the coordination behaviour of the in situ formed catalytic species HRh(2,7-bis(SO 3Na)-Xantphos)(CO) 2 was studied by high-pressure NMR spectroscopy which indeed showed the desired bis-equatorial coordination of the ligand to the rhodium center.