The reaction of the cationic (PNP)Ir(I)(cyclooctene) complex (1) (PNP = 2,6-bis-(di-tert-butylphosphinomethyl)pyridine) with 2-butanone or 3-pentanone results in the selective, quantitative activation of a β C−H bond, yielding O,C-chelated complexes. Calculations show that the selectivity is both kinetically (because of steric reasons in the rate determingin step (RDS)) and thermodynamically controlled, the latter as a result of carbonyl oxygen coordination in the product. The RDS is formation of the η2-C,H intermediates from the complexed ketone intermediates. Water has a strong influence on the regioselectivity, and in its presence, reaction of 1 with 2-butanone gives also the α terminal C−H activation product. Computational studies suggest that water can stabilize the terminal α C−H activation product by hydrogen bonding, forming a six-membered ring with the ketone, as experimentally observed in the X-ray structure of the acetonyl hydride aqua complex.