The reactivity of (eta(3)-allyl)palladium chloro dimers [(1-R-eta(3)-C(3)H(4))PdCl](2) (R = H or Me) towards a sterically hindered diphosphazane ligand [EtN{P(OR)(2)}(2)] (R = C(6)H(3)(Pr(i))(2)-2,6), has been investigated under different reaction conditions. When the reaction is carried out using NH(4)PF(6) as the halide scavenger, the cationic complex [(1-R-eta(3)-C(3)H(4))Pd{EtN(P(OR)(2))(2)}]PF(6) (R = H or Me) is formed as the sole product. In the absence of NH(4)PF(6), the initially formed cationic complex, [(eta(3)-C(3)H(5))Pd{EtN(P(OR)(2))(2)}]Cl, is transformed into a mixture of chloro bridged complexes over a period of 4 days. The dinuclear complexes, [(eta(3)-C(3)H(5))Pd(2)(mu-Cl)(2){P(O)(OR)(2)}{P(OR)(2)(NHEt)}] and [Pd(mu-Cl){P(O)(OR)(2)}{P(OR)(2)(NHEt)}](2) are formed by P-N bond hydrolysis, whereas the octa-palladium complex [(eta(3)-C(3)H(5))(2-Cl-eta(3)-C(3)H(4))Pd(4)(mu-Cl)(4)(mu-EtN{P(OR)(2)}(2))](2), is formed as a result of nucleophilic substitution by a chloride ligand at the central carbon of an allyl fragment. The reaction of [EtN{P(OR)(2)}(2)] with [(eta(3)-C(3)H(5))PdCl](2) in the presence of K(2)CO(3) yields a stable dinuclear (eta(3)-allyl)palladium(I) diphosphazane complex, [(eta(3)-C(3)H(5))[mu-EtN{P(OR)(2)}(2)Pd(2)Cl] which contains a coordinatively unsaturated T-shaped palladium center. This complex exhibits high catalytic activity and high TON's in the catalytic hydrophenylation of norbornene.