The synthesis and characterisation of two new water-soluble Rh-I mononuclear 1,4-diazabutadiene (DAD(s)) complexes of general formula: [Rh(DAD(s)-R)(COD)], where (DAD(s) = sulfonated-tagged-1,4-diazabutadiene, COD = cyclooctadiene; and R = H or C10H8), are described. The rhodium(I) complexes were obtained via a complexation reaction of [Rh(COD)(MeCN)(2)]BF4 with the sulfonated alpha -diimine (DAD) ligands, which were previously obtained from a Schiff base condensation reaction of 4-aminophenol with either 1,2-ethanedione or acenapthenequinone. All rhodium complexes and their precursor ligands were characterised using H-1 NMR, C-13 NMR, FT-IR spectroscopy and mass spectrometry. Their performance as catalyst precursors in the hydroformylation of 1-octene was assessed and compared to those of the non-sulfonated Rh-I mononuclear 1,4-diazabutadiene (DAD) complexes. Utilisation of the water soluble [Rh(DAD(s)-R)(COD)] lead to high conversions and regioselectivity (linear/branched aldehyde ratio) in the aqueous biphasic hydroformylation of 1-octene. Additionally, the catalysts were recovered by phase separation and are reusable over four consecutive catalytic runs without significant loss in catalytic activity.