Isobutanal is a high value bulk material that, in principle, could be produced with 100 % atom‐economy by isoselective hydroformylation of propylene with syngas. However, leading industrial Rh‐ and Co‐catalyzed hydroformylation methods preferentially form n‐butanal over the iso‐product, and methods offering isoselectivity remain underdeveloped. Here we report an iodide‐assisted Pd‐catalyzed hydroformylation of propylene that produces isobutanal with unprecedented levels of selectivity. The method involves PdI2, simple alkyl monophosphines, such as tricyclohexylphosphine, and common green solvents, enabling the title reaction to occur with isoselectivity in up to 50 : 1 iso/n product ratios under industrially relevant conditions (80–120 °C). The catalytic and preliminary mechanistic experiments indicate a key role of the iodide anions in both the catalytic activity and the isoselectivity.