A highly efficient palladium(II)‐catalyzedhydration of a wide range of alkynylphosphonates to the corresponding β‐ketophosphonates has been developed to give high yields at 80 °C in 1, 4‐dioxane, with no acidic or alkaline cocatalysts required. The described catalytic system should provide an efficient alternative to highly toxic mercury‐catalyzed methodologies and be useful in synthetic programs