Water-borne phosphine-functionalized core-cross-linked micelles (CCM) consisting of a hydrophobic core and a hydrophilic shell were obtained as stable latexes by reversible addition-fragmentation chain transfer (RAFT) in water in a one-pot, three-step process. Initial homogeneous aqueous-phase copolymerization of methacrylic acid (MAA) and poly(ethylene oxide) methyl ether methacrylate (PEOMA) is followed by copolymerization of styrene (S) and 4-diphenylphosphinostyrene (DPPS), yielding P(MAA-co-PEOMA)-b-P(S-co-DPPS) amphiphilic block copolymer micelles (M) by polymerization-induced self-assembly (PISA), and final micellar cross-linking with a mixture of S and diethylene glycol dimethacrylate. The CCM were characterized by dynamic light scattering and NMR spectroscopy to evaluate size, dispersity, stability, and the swelling ability of various organic substrates. Coordination of [Rh(acac)(CO)2 ] (acac=acetylacetonate) to the core-confined phosphine groups was rapid and quantitative. The CCM and M latexes were then used, in combination with [Rh(acac)(CO)2 ], to catalyze the aqueous biphasic hydroformylation of 1-octene, in which they showed high activity, recyclability, protection of the activated Rh center by the polymer scaffold, and low Rh leaching. The CCM latex gave slightly lower catalytic activity but significantly less Rh leaching than the M latex. A control experiment conducted in the presence of the sulfoxantphos ligand pointed to the action of the CCM as catalytic nanoreactors with substrate and product transport into and out of the polymer core, rather than as a surfactant in interfacial catalysis.