The commercially available 2,2'-dipyridylamine was used as a supporting ligand in the palladium-catalyzed Sonogashira cross-coupling reaction. The reactions between aryl iodides and terminal alkynes with different steric hindrance can be efficiently performed in the absence of copper in neat water at room temperature. The superior catalytic performance of the catalytic system was attributed to water solubility of the palladium 2,2'-dipyridylamine complex. Palladium nanoparticles with small size and narrow size distribution were formed after the cross-coupling reaction.