With the exception of activated sulfonate esters, oxidative addition of Ar-O bonds to Pd(O) complexes is extremely rare. This has led to a general perception that Pd-catalyzed cross-coupling is not feasible with O-based electrophiles such as aryl esters. We report that pyrone and coumarin esters do undergo oxidative addition to Pd(PCy3)(2), with Pd insertion into either the acyl-O or Ar-O bond. Addition of the acyl-O bond to Pd(O) is kinetically favoured and reversible, while addition of the Ar-O bond is thermodynamically favoured. Using a larger and more electron-rich pivalate derivative disfavours acyl-O cleavage, enabling selective oxidative addition of the Ar-O bond and corresponding catalytic cross-coupling.