The process was discovered by the German chemist Otto Roelen in 1938 in the course of investigations of the Fischer–Tropsch process. Aldehydes and diethylketone were obtained when ethylene was added to an F-T reactor. Through these studies, Roelen discovered the utility of cobalt catalysts. HCo(CO), which had been isolated only a few years prior to Roelen's work, was shown to be an excellent catalyst. The term oxo synthesis was coined by the Ruhrchemie patent department, who expected the process to be applicable to the preparation of both aldehydes and ketones. Subsequent work demonstrated that the ligand tributylphosphine (PBu) improved the selectivity of the cobalt-catalysed process.  The mechanism of Co-catalyzed hydroformylation was elucidated by Richard F. Heck and David Breslow in the 1960s.
In 1968, highly active rhodium-based catalysts were reported. Since the 1970s, most hydroformylation relies on catalysts based on rhodium. Water-soluble catalysts have been developed.  They facilitate the separation of the products from the catalyst.