Bonding and reactivity of [(N4)Pd CHX] complexes have been investigated at the M06/BS2//B3LYP/BS1 level. Feasible mechanisms for the unselective formation of ethane and methyl chloride from mono-methyl Pd complexes and selective formation of ethane or methyl chloride from Pd complexes are reported here. Density functional theory (DFT) results indicate that Pd is more reactive than Pd and Pd in different oxidation states that follow different mechanisms. Pd complexes react in three steps: (i) conformational change, (ii) transmetalation, and (iii) reductive elimination. In the first step a five-coordinate Pd intermediate is formed by the cleavage of one Pd-N bond, and in the second step one methyl group is transferred from the Pd complex to the above intermediate via transmetalation, and subsequently a six-coordinate Pd intermediate is formed by disproportion. In this step, transmetalation can occur on both singlet and triplet surfaces, and the singlet surface is lying lower. Transmetalation can also occur between the above intermediate and [(N4)Pd(CH)(CHCN) ], but this not a feasible path. In the third step this Pd intermediate undergoes reductive elimination of ethane and methyl chloride unselectively, and there are three possible routes for this step. Here axial-equatorial elimination is more facile than equatorial-equatorial elimination. Pd complexes react in two steps, a conformational change followed by reductive elimination, selectively forming ethane or methyl chloride. Thus, Pd complex reacts through a six-coordinate Pd intermediate that has competing C-C and C-Cl bond formation, and Pd complex reacts through a five-coordinate Pd intermediate that has selective C-C and C-Cl bond formation. Free energy barriers indicate that iPr, in comparison to the methyl substituent in the N4 ligand, activates the cleaving of the Pd-N bond through electronic and steric interactions. Overall, reductive elimination leading to C-C bond formation is easier than the formation of a C-Cl bond.