2-Aminobiphenyl palladacycles are among the most successful precatalysts for Pd-catalyzed cross-coupling reactions, including aryl amination. However, the role of NH-carbazole, a byproduct of precatalyst activation, remains poorly understood. Herein, the mechanism of the aryl amination reactions catalyzed by a cationic 2-aminobiphenyl palladacycle supported by a terphenyl phosphine ligand, PCyp 2 Ar Xyl2 (Cyp = cyclopentyl; Ar Xyl2 = 2,6bis(2,6-dimethylphenyl)phenyl), P1, has been thoroughly investigated. Combining computational and experimental studies, we found that the Pd(II) oxidative addition intermediate reacts with NH-carbazole in the presence of the base (NaO t Bu) to yield a stable aryl carbazolyl Pd(II) complex. This species functions as the catalyst resting state, providing the amount of monoligated LPd(0) species required for catalysis and minimizing Pd decomposition. In the case of a reaction with aniline, an equilibrium between the carbazolyl complex and the on-cycle anilido analogue is established, which allows for a fast reaction at room temperature. In contrast, heating is required in a reaction with alkylamines, whose deprotonation involves coordination to the Pd center. A microkinetic model was built combining computational and experimental data to validate the mechanistic proposals. In conclusion, our study shows that despite the rate reduction observed in some reactions by the formation of the aryl carbazolyl Pd(II) complex, this species reduces catalyst decomposition and could be considered an alternative precatalyst in cross-coupling reactions.