Reactions of 2-hydroxymethylbenzyl halides with Pd(PPh 3 ) 4 afford complexes Pd(CH 2 C 6 H 4 -2-CH 2 OH-κ 2 C 1R ,O)(PPh 3 )X (X ) Br, 3; X ) Cl, 4) containing bidentate 2-hydroxymethylbenzyl ligands. Further reactions of 3 or 4 with NaH produce the binuclear cyclocondensation product Pd 2 (µ-2-OCH 2 C 6 H 4 CH 2 ) 2 (PPh 3 ) 2 , 7, containing a central planar Pd 2 O 2 unit incorporated into a system of five fused rings. Compound 7 undergoes phosphine substitution to form related binuclear products Pd 2 (µ-2-OCH 2 C 6 H 4 CH 2 ) 2 (PAr 3 ) 2 {Ar ) p-MeC 6 H 4 , 8; p-(MeO)-C 6 H 4 , 9} but is cleaved by more electron-donating phosphines and by diphosphines to give mononuclear alkoxides Pd(OCH 2 C 6 H 4 CH 2 -κ 2 C 1R ,O)(P-P) (P-P ) dppf, 10; dppe, 11). Compounds 3, 4, and 7-9 react readily with carbon monoxide to liberate the lactone 3-isochromanone via carbonyl insertion, and the acyl intermediate PdCl(COCH 2 C 6 H 4 -2-CH 2 -OH)(PPh 3 ), 12b, has been studied spectroscopically. Reactions of 2-halogenobenzenealkanols with Pd(PPh 3 ) 4 afford simple derivatives with monodentate aryl ligands, trans-Pd(C 6 H 4) and the known complex (n ) 1, X ) I, 14), which on reaction with NaH are also converted into binuclear products Pd 2 (µ-2-O(CH 2 ) n C 6 H 4 ) 2 (PPh 3 ) 2 {n ) 1, 19a (previously reported) and n ) 2, 20}; compound Pd 2 (µ-2-OCH 2 C 6 H 4 ) 2 {P(C 6 H 4 -4-OMe) 3 } 2 , 25, is formed from 19a by phosphine exchange, and cleavage of 19a or 20 by diphosphines generates new mononuclear complexes 22-24 containing chelating alkoxide ligands. Carbonylations of these arylpalladium derivatives of 2-hydroxyalkylphenyl halides to form the respective benzolactones, phthalide and 3,4dihydroisocoumarin, have been investigated. Crystal structures of mononuclear compounds 3, 4, 14, and 17, including intermolecular H-bonding interactions to halogen ligands in the solid state, and of binuclear compounds 7, 8, and 25 are reported and discussed. The new complexes are discussed in relation to the mechanism of Pd(0)-catalyzed syntheses of benzolactones from aromatic halo alcohols; in production of 3-isochromanone, the results support a process involving coordination of a hydroxyl group prior to reductive elimination of organic product but with CO insertion into the Pd-C rather than the Pd-O bond.