The reactivity of the electron-rich palladium alkyl cation, [Pd(dippe)R] ϩ BAr 4 Ϫ (dippe = 1,2-bis(diisopropylphosphino)ethane; R = η 3 -CH 2 Ph or CH 3 ; BAr 4 = {B[3,5-(F 3 C) 2 C 6 H 3 ] 4 }) with a variety of small molecules is reported. Although the benzyl cation is unreactive towards carbon monoxide and dihydrogen, the corresponding methyl cation, [Pd(dippe)Me(s)] ϩ (s = Et 2 O, THF or o-dichlorobenzene) reacts rapidly with H 2 to produce the dihydride-bridged dimer {[(dippe)Pd] 2 (µ-H) 2 } 2ϩ , and with CO to produce the dinuclear mixed-valence, cationic complex [Pd(dippe)(µ-CO)Pd(dippe)Me][BAr 4 ]. In addition, the methyl cation can abstract alkyl groups from neutral dialkyl complexes; thus, the addition of [Pd(dippe)Me(s)] ϩ to Pd(dippe)(CH 2 Ph) 2 results in the formation of the methyl benzyl derivative Pd(dippe)Me(CH 2 Ph) and the cationic benzyl cation [Pd(dippe)(η 3 -CH 2 Ph)] ϩ . Methyl group interchange is also observed for the reaction of the methyl cation with the neutral dimethyl; when [Pd(dippe)Me(s)] ϩ is mixed with Pd(dippe)( 13 CH 3 ) 2 , the carbon-13 label is immediately scrambled to the cation. These exchange reactions are suggested to occur via dinuclear intermediates. The mixed-valence dinuclear species mentioned above has been investigated in some detail; mechanistic studies have indicated that the addition of CO to [Pd(dippe)Me(s)] ϩ probably proceeds via simple substitution of the solvent by CO to generate the expected mononuclear methyl carbonyl cation [Pd(dippe)Me(CO)] ϩ , followed by migratory insertion to give the acetyl carbonyl derivative [Pd(dippe)(COMe)(CO)] ϩ . The final product is the dinuclear mixed-valence species [Pd(dippe)(µ-CO)Pd(dippe)Me][BAr 4 ], which is accompanied by the formation of acetone (Me 2 CO) and the dicarbonyl dication [Pd(dippe)(CO) 2 ] 2ϩ . Presumably, methyl transfer occurs at some stage from the methyl cation to generate the methyl-acetyl complex, Pd(dippe)Me(COMe); reductive elimination of acetone under CO from the methyl-acetyl complex produces the Pd 0 complex Pd(dippe)CO which then reacts with the starting methyl cation to generate the dinuclear mixed-valence species. Addition of CO to the mixed-valence species does not result in formation of mononuclear complexes, rather 1 equivalent of CO adds to form a new dinuclear complex with two bridging COs.