Dicarboxylic acids are compounds of high value, but to date long-chain α,ω-dicarboxylic acids have been difficult to access in a direct way. Unsaturated fatty acids are ideal starting materials with their molecular structure of long methylene sequences and a carboxylate functionality, in addition to a double bond that offers itself for functionalization. Within this paper, we established a direct access to α,ω-dicarboxylic acids by combining isomerization and selective terminal carbonylation of the internal double bond with water as a nucleophile on unsaturated fatty acids. We identified the key elements of this reaction: a homogeneous reaction mixture ensuring sufficient contact between all reactants and a catalyst system allowing for activation of the Pd precursor under aqueous conditions. Experiments under pressure reactor conditions with [(dtbpx)Pd(OTf)2] as catalyst precursor revealed the importance of nucleophile and reactant concentrations and the addition of the diprotonated diphosphine ligand (dtbpxH2)(OTf)2 to achieve turnover numbers >120. A variety of unsaturated fatty acids, including a triglyceride, were converted to valuable long-chain dicarboxylic acids with high turnover numbers and selectivities for the linear product of >90%. We unraveled the activation pathway of the PdII precursor, which proceeds via a reductive elimination step forming a Pd0 species and oxidative addition of the diprotonated diphosphine ligand, resulting in the formation of the catalytically active Pd hydride species. Theoretical calculations identified the hydrolysis as the rate-determining step. A low nucleophile concentration in the reaction mixture in combination with this high energetic barrier limits the potential of this reaction. In conclusion, water can be utilized as a nucleophile in isomerizing functionalization reactions and gives access to long-chain dicarboxylic acids from a variety of unsaturated substrates. The activity of the catalytic system of hydroxycarbonylation ranks as one of the highest achieved for isomerizing functionalizations in combination with a high selectivity for the linear product.