Selective oxidation of styrene to benzaldehyde has been carried out for the first time in aqueous phase by using a green and water-soluble palladium(II) complex as a catalyst under neutral, chloride and base-free conditions. The influences of reaction temperature, reaction time, palladium concentration and O2 pressure on the conversion of styrene and the selectivity to benzaldehyde have been discussed. The reaction products, benzaldehyde, benzoic acid, acetophenone are readily isolated by ether extraction at room temperature. The water-soluble catalyst immobilized in aqueous phase can be reused for eight catalytic runs with an almost constant catalytic activity for the styrene oxidation. The influence of substituting groups in the aromatic ring of styrene on the reactivity was also discussed. Spectroscopic studies revealed that the hydrophilic dipyridyl-based ligand (L) with Pd(OAc)2 formed a water-soluble Pd(II) complex. The UV/Vis spectra analysis further showed that the Pd(II)-L complex could serve as the catalytically active species in the present catalytic system.