Bimetallic and cluster rhodium carbonyl complexes catalyze the biphasic reduction of nitro compounds under mild conditions (using CO/5 MNaOH, C6H6or PhCH3). Rate studies indicate the sensitivity of the reaction to the nature of the organic substrate, base concentration, and the temperature. A previously observed bimetallic (Co2(CO)8and (1,5-HDRhCl)2) and phase transfer catalyzed [R4N+X−] reduction of nitro compounds was found to be a consequence of the inhibition and reactivation of the true catalyst by the quaternary ammonium salt and cobalt carbonyl, respectively.