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[Display omitted] • Mg incorporated into zeolite Beta framework by two-step postsynthesis procedure. • Rh3+/[MgO 4 ]2- electrostatic interactions stabilize single Rh atoms. • Catalytic efficiency of Rh/Mg-Beta due to low atomic coordination and basicity. • High selectivity in phenol hydrogenation to cyclohexanone at mild conditions. Nanoparticles are of interest in heterogeneous catalysis because of their excellent activity associated with atoms in a low coordination environment. However, their high reactivity becomes a drawback where selectivity is desired, compounded by their propensity towards agglomeration. Here, we show that stable subnanometric Rh particles can be prepared in a Mg-doped zeolite Beta based on the electrostatic interaction of the negatively charged zeolitic framework and the Rh3+ precursor. The Mg ions are incorporated into the zeolite framework whereas the Rh is located in the channels adjacent to the Mg. With only 0.27 and 0.5 wt% Mg and Rh, respectively, the Rh/Mg-Beta catalysts were highly active with > 94 % selectivity for the hydrogenation of phenol to cyclohexanone, an important intermediate for the production of Nylon. Key to the selectivity is the formation of the C=O double bond early in the reaction sequence, aided by the basicity of the Mg-Beta support. [ABSTRACT FROM AUTHOR]