The mechanism of the palladium-catalysed asymmetric aza-Michael addition of aniline to alpha,beta-unsaturated N-imide was examined from several aspects using a combination of techniques, including X-ray crystallography, mass spectrometry, NMR, UV/Vis spectroscopy, and kinetic studies. The binding of aniline to the dicationic palladium(II) metal centre was found to occur in two consecutive steps: The binding of the first aniline is fast and reversible, whereas the binding of the second aniline is slower and irreversible. This occurs in competition with the binding of the N-imide, which forms a planar six-membered chelate ring with the metal centre; coordinating through the 1,3-dicarbonyl moiety. Isotopic labelling revealed that the addition of N-H occurs in a highly stereoselective manner, allowing the synthesis of optically active beta(2)- and beta(2,3)-amino acid derivatives. The stereochemistry of the addition is postulated to be syn. In situ kinetic studies provided evidence for product inhibition. The binding of the N-imide to the catalyst was found to be the rate-limiting step. Aniline was found to be an inhibitor of the pre-catalyst. The study culminated in the design of a new reaction protocol. By maintaining a low concentration of the aniline substrate during the course of the reaction, significant enhancement of yield and enantioselectivity can be achieved.