Reaction of a four coordinate, 16-electron Ir complex, [Ir(iPr)4(POCOP)(PPh3)] (4) ((iPr)4(POCOP = 2,6-bis(di-isopropyl phosphinito)benzene, κ3-C6H3-1,3-[OP(iPr)2]2), with H2 resulted in an oxidative addition product, cis-dihydride complex, cis-[Ir(H)2(iPr)4(POCOP)(PPh3)] (cis-5) presumably via the intermediacy of a sigma complex, [Ir(η2-H2)(iPr)4(POCOP)(PPh3)]. The cis-dihydride complex completely isomerizes to the trans-dihydride complex trans-[Ir(H)2(iPr)4(POCOP)(PPh3)] (trans-5) under ambient conditions in about 3 h. It was found that the steric and electronic features on the iridium center have significant influence on the approach of H2 onto the metal center followed by oxidative addition and isomerization. The isomerization process was studied in detail and all the mechanistic aspects have been elucidated using a combination of both experimental work and computation. The cis-dihydride complex isomerizes to the trans-dihydride by compensating the trans influence of the strongly trans-directing hydride ligand. A mechanism involving the exchange of the position of PPh3 with a hydride ligand cis to itself via PPh3 dissociation and re-coordination thereby resulting in the formation of the trans-dihydride complex, has been proposed for the isomerization. The cis-dihydride was found to be a highly active catalyst for hydrogenation of ethylene. A competing reactivity study of cis-dihydride between isomerization versus insertion of C2H4 into the Ir—H bond, was studied experimentally and computationally.