Sterically demanding, water-soluble alkylphosphine ligands 2-(di-tert-butylphosphino)ethyltrimethylammonium chloride (t-Bu-Amphos) and 4-(di-tert-butylphosphino)-N,N-dimethylpiperidinium chloride (t-Bu-Pip-phos) in combination with palladium salts provided active catalysts for the cross-coupling of aryl halides under mild conditions in aqueous solvents, whereas 4-(dicyclohexylphosphino)-N,N-dimethylpiperidinium chloride (Cy-Pip-phos) gave a less active catalyst. Catalyst activity increased with increasing cone angle of the ligands, but the χ electronic parameter determined from the symmetric C−O stretching frequency of LNi(CO)3 did not correlate with catalyst activity. Catalyst activity correlated with other calculated electronic parameters, such as the HOMO−LUMO energy gap of the ligand and the HOMO energy level of the LPd(0) species. Multinuclear NMR spectroscopic studies showed that t-Bu-Amphos and t-Bu-Pip-phos rapidly form L2Pd(0) (L = t-Bu-Amphos or t-Bu-Pip-phos) complexes when reacted with Pd(OAc)2 under reducing conditions over a range of L:Pd ratios. In contrast, the coordination chemistry of Cy-Pip-phos depended on the Cy-Pip-phos:Pd ratio. At a ≤1:1 Cy-Pip-phos:Pd ratio, rapid formation of L2Pd(0) occurred. At higher L:Pd ratios, initial formation of trans-(Cy-Pip-phos)2PdCl2 was observed followed by slow reduction to the Pd(0) complex.