Functionalized MCM-41 samples containing different contents of phenyl groups (Ph-MCM-41) were synthesized by co-condensation of phenyltrimethoxysilane (PTMS) and tetraethyl orthosilicate (TEOS) at room temperature. These Ph-MCM-41 samples still exhibited the ordered mesoporous structure even at the Ph-content up to 20% and after depositing Pd particles to form the Pd/Ph-MCM-41 catalyst. For the iodobenzene Ullmann coupling reaction in aqueous conditions, Pd/Ph-MCM-41 exhibited much higher activity and selectivity toward biphenyl than Pd/SiO2 and Pd/MCM-41. The conversion reached 75.4% after 10h at 100 degrees C and the selectivity remained 98%. In addition, the Pd/Ph-MCM-41 catalyst was able to be used atleast three times with only a slight decrease in both activity and selectivity. The results show good potential of this kind of catalyst for industrial application in viewpoint of green chemistry since the replacement of organic solvent with water could greatly reduce the environmental pollution. According to various characterizations, such as XRD, TEM, NMR, N-2 adsorption-desorption isotherms, the excellent activity and selectivity of the Pd/Ph-MCM-41 could be attributed to the high surface area of Ph-MCM-41 which ensured the high and uniform dispersion of Pd particles, the ordered mesoporous structure which facilitated the diffusion of reactant and product molecules, the increase in hydrophobicity of the catalyst owing to the Ph-modification which favored the entrance of reactant molecules into the channels to have contact with Pd active sites and also inhibited the dehalogenation of iodobenzene to form benzene. (c) 2006 Elsevier B.V. All rights reserved.