An environmentally friendly approach was applied to the palladium-catalyzed halogenation of aromatic C–H bonds by N-halosuccinimide. Neat grinding and liquid-assisted grinding of the Pd(OAc)2 precatalyst in the presence of p-toluenesulfonic acid in a ball mill led to the in situ formation of active palladium species that catalyzed the halogenation of azobenzene. Detailed insight into the mechanism of this process was obtained by in situ Raman monitoring, which revealed the nature of the catalytically active PdII species and intermediates and confirmed the crucial role of p-toluenesulfonic acid and acetonitrile as additives in the catalytic halogenation of azobenzene. By quantum-chemical (DFT) modelling of bromination of cyclopalladated azobenzene three reaction mechanisms were characterized: oxidative addition followed by reductive elimination, with neutral or protonated N-bromosuccinimide (NBS), and electrophilic cleavage with neutral NBS. All three mechanisms seem to be operative, with relative participation depending on the reaction conditions. Two mechanistic features were recognized in the oxidative addition of bromine to palladium atom: the biradical singlet character in the transition state realized with neutral NBS as the active species, and the barrierless migration of Br+ with protonated NBS.