pi-Allylpalladium complexes could be generated in water by the palladium(0) water soluble catalyst prepared in situ from palladium acetate and TPPTS. These complexes were transmetalated with indium to react with benzaldehyde. The aqueous solution of Pd(0)(TPPTS)(n) could be reused without deterioration of the catalyst in the first and second recycling. The system proved to be efficient with primary and secondary allylic substrates. The stereochemical outcome of the allylation through umpolung of allylpalladium, was also studied using models with a restraint conformation.