Here, new series of the 2‐hydroxyethyl‐substituted (NHC)PdI2(pyridine) (Pd‐PEPPSI) complexes have been synthesized. These complexes have been prepared from the 2‐hydroxyethyl‐substituted N‐heterocyclic carbene (NHC) precursors, palladium chloride and pyridine. The synthesized Pd‐PEPPSI complexes have been characterized by using 1H NMR, 13C NMR, FTIR spectroscopy and elemental analysis techniques. The catalytic activity of the 2‐hydroxyethyl‐substituted Pd‐PEPPSI complexes has been examined in the Sonogashira cross‐coupling reaction by using phenylacetylene and aryl bromide. The Pd‐PEPPSI complexes have demonstrated great activity in the Sonogashira cross‐coupling reaction. The molecular and crystal structures of the three of the Pd‐PEPPSI complexes were determined by single‐crystal X‐ray diffraction method. X‐ray studies show that all the molecular structures adopt slightly distorted square‐planar geometry around the palladium (II) center.