[PdCl2(PPh3)(2)]-PPh3, in the presence of NEt3, is moderately active in the ethoxycarbonylation of 2-chlorocyclohexylketone to the beta-ketoester (ca. 140 TON in 4 h at 100 degrees C, 100 atm, P/Pd = 2.5, [Pd] = 5 X 10(-3) mol l(-1), NEt3/substrate = 1.2). The yield increases upon increasing p(CO), passes for a maximum when the P/Pd molar ratio is 2.5 and it is approximately of the first order with respect to the concentration of the substrate. A reaction mechanism is proposed, which involves the oxidative addition of the chloride to a Pd(0) species, CO insertion forming a Pd(II) beta-ketoacyl complex, nucleophilic attack of ethanol to the carbon atom of the acyl moiety and HCl elimination to regenerate the starting Pd(0) species. When the carbonylation is attempted in the presence of H2O and in the absence of NEt3, in place of the expected carbonylation product, there is hydrogen transfer from the system H2O-CO to the organic substrate with hydrogenolysis of the C-Cl bond. For the hydrodechlorination reaction it is proposed that, after the oxidative addition step to a Pd(0) complex, the Pd-C bond of the alkyl intermediate is protonolyzed by the acid that forms during the course of the reaction and that the Pd(II) complex is then reduced by CO in the presence of H2O. (C) 1999 Published by Elsevier Science B.V. All rights reserved.