Cationic palladium allyl complexes [(η3-C3H5)Pd(κ2P∧O)]+SbF6- (2[SbF6], P∧O ≡ Ph2P(CH2)2C(O)OEt; 3[SbF6], o-Ph2PC6H4C(O)OEt; 4[SbF6], Ph2P(CH2)2P(O)Ph2) have been prepared. In all complexes the oxygen donor can be displaced by other ligands such as carbon monoxide and ethylene. Displacement of an ester donor occurs much more readily than displacement of the phosphine oxide function. Above 0 °C, the resulting ethylene complexes [(η3-C3H5)Pd(C2H4)(κ1P∼O)]+ react to give (1,2,5-η3)-pent-1-en-5-yl complexes [(H2CCH(CH2)3Pd(κ2P∧O)]+. A rate constant of e.g. k(17 °C) = (2.27 ± 0.11) × 10-4 s-1 was determined for P,O ≡ Ph2P(CH2)2C(O)OEt by 1H NMR spectroscopy. Using 2−4 as catalyst precursors for ethylene dimerization, the allyl moiety is ultimately cleaved from the metal center as 1,4-pentadiene.