Optimizing catalysis, separation and recycle of organometallic catalysts remains a key concern for industrial homogeneously-catalyzed reactions. A new biphasic approach has been proposed based upon ionic liquids (ILs) and compressed or supercritical CO₂. An IL/CO₂ system has numerous advantages, as most ILs are immeasurably insoluble in CO₂ and CO₂ is very soluble in the IL phase. This study will show quantitatively the beneficial effect of CO₂ on the viscosity of the ionic liquid phase and the effect on diffusivity. Moreover, the presence of CO₂ can significantly increase the solubility of reaction gases (H₂ and CO) in the catalytic IL-phase. There are a several studies in the literature that offer contradictory results on the effects of CO₂ on reaction rates involving reaction gases in IL/CO₂ systems. Some indicate that CO₂ may enhance reactivity and selectivity in catalyzed reactions in IL/CO₂ systems and others indicate that there is no effect or a slower reaction rate. However, little quantitative data exists on the kinetics, and phase equilibria of these type of systems. This presentation will illustrate the mechanism of CO₂ on the Rh-catalyzed hydrogenation and hydroformylation of 1-octene in a biphasic ionic liquid/CO₂ system. The effects of phase equilibria will be shown to largely control the reaction rates and are thus critical to understanding this reaction platform. Complex phase behavior exists at varying levels of conversions and pressure, resulting in regions of multiple liquid phases and various critical transitions that must be understood to rationalize the kinetics. Mixing and dispersion may also play significant roles.