Pd-catalyzed C(sp3)–H activation/alkylation of 2-tert-butylaryl halides with alkyl halides and CH2Br2 represents an advantageous strategy for the C–H functionalization with halogens as traceless directing groups. Several possible mechanisms were proposed for the reactions, but no further evidence was available to judge their relative feasibilities. Herein, a mechanistic study was performed with the aid of density functional theory (DFT) methods. Calculations indicate that the coupling of aryl bromides with alkyl chlorides is likely to generate alkylated benzocyclobutenes via aryl–Br oxidative addition on Pd(0) catalysts, C(sp3)–H activation, alkyl–Cl oxidative addition, aryl–alkyl reductive elimination, aryl–H activation, and aryl–C(sp3) reductive elimination. The coupling of aryl iodides with CH2Br2 is likely to generate indane derivatives via aryl–I oxidative addition, C(sp3)–H activation, alkyl–Br oxidative addition, aryl–CH2Br reductive elimination, alkyl–Br oxidative addition, C(sp3)–alkyl reductive ...