Metal or metal cluster-doped zeolites catalyse a wide variety of reactions. In this work, a coupling reaction between bromobenzene and phenylboronic acid to yield biphenyl with the Pd–H-Beta zeolite catalyst was investigated with density functional theory (DFT) calculations. Utilizing a model system with tetrahedral Pd4 clusters within the H-Beta zeolite, it was demonstrated that the catalyst exhibited notable reactivity by effectively reducing the activation energy barrier for the reaction. Our investigation revealed that the zeolite framework facilitated electron transfer to the Pd cluster, thereby increasing the reaction activity. The coupling reaction was shown to be exothermic and comprise three main steps: oxidative addition of bromobenzene (C6H5Br), transmetallation with phenylboronic acid (C6H5B(OH)2), and reductive elimination of biphenyl (C12H10). Specifically, in the transmetallation step, which was the rate-determining step, the C–B bond breaking in phenylboronic acid (C6H5B(OH)2) and the phenylboronate anion (C6H5B(OH)3–) were compared under neutral and basic conditions, respectively. This comprehensive study clarifies the mechanism for the reaction with the modified Pd zeolite catalyst and highlights the essential role of the zeolite framework.