The reactivity of (η3-allyl)palladium chloro dimers [(1-R-η3-C3H4)PdCl]2 (R = H or Me) towards a sterically hindered diphosphazane ligand [EtN(P(OR)2)2] (R = C6H3(Pri)2-2,6), has been investigated under different reaction conditions. When the reaction is carried out using NH4PF6 as the halide scavenger, the cationic complex [(1-R-η3-C3H4)Pd(EtN(P(OR)2)2)]PF6 (R = H or Me) is formed as the sole product. In the absence of NH4PF6, the initially formed cationic complex, [(η3-C3H5)Pd(EtN(P(OR)2)2)]Cl, is transformed into a mixture of chloro bridged complexes over a period of 4 days. The dinuclear complexes, [(η3-C3H5)Pd2(µ-Cl)2(P(O)(OR)2)(P(OR)2(NHEt))] and [Pd(µ-Cl)(P(O)(OR)2)(P(OR)2(NHEt))]2 are formed by P–N bond hydrolysis, whereas the octa-palladium complex [(η3-C3H5)(2-Cl-η3-C3H4)Pd4(µ-Cl)4(µ-EtN(P(OR)2)2)]2, is formed as a result of nucleophilic substitution by a chloride ligand at the central carbon of an allyl fragment. The reaction of [EtN(P(OR)2)2] with [(η3-C3H5)PdCl]2 in the presence of K2CO3 yields a stable dinuclear (η3-allyl)palladium(i) diphosphazane complex, [(η3-C3H5)[µ-EtN(P(OR)2)2Pd2Cl] which contains a coordinatively unsaturated T-shaped palladium center. This complex exhibits high catalytic activity and high TON’s in the catalytic hydrophenylation of norbornene. © 2007 The Royal Society of Chemistry.