A comprehensive DFT investigation has been performed for a series of the Pd(OAc)2-catalyzed C-H activations, updating and extending the understanding of directing group effect. In the beginning, the directed and undirected C-H activation mechanisms, based on 10 model reactions, have been discussed comparatively, which disclosed that directing group can exert a thermodynamic driving force, not necessarily a kinetic promotion, on the C-H activation process. Formation of the open palladation species via the undirected pathway is thermodynamically unspontaneous (ΔG = 4-9 kcal/mol), in sharp contrast to that of the cyclopalladation species via the directed pathway (ΔG < 0). Further calculations revealed that the free-energy barriers of proton-transfer are in fact not so high on the undirected pathway (17-24 kcal/mol), while mediation of some O-center groups in the directed pathway would increase the free-energy barriers of proton-transfer. For pyridine N-oxide systems, the undirected mechanism was estimated to be more plausible than the 4-member-directed one both thermodynamically and kinetically. In addition, the uncommon 7-membered cyclopalladation has been tentatively explored using two current examples, predicting that electron-rich directing groups can help to stabilize the 7-membered palladacycles formed.