A Pd/C-HCl catalytic system is highly active and selective in the hydrogen transfer from H2O-CO to ArCHOHCOOH for the synthesis of ArCH2COOH (Ar is para substituted with a OH group). Typical reaction conditions are: temperature 50-70 degrees C; P-CO 20-80 atm; solvent: acetonitrile; substrate/Pd/HCl/H2O = 200-400/1/25-100/500-2000; [Pd] = 0.6-1.2 mmol . l(-1). The reaction rate is approximately of the first order with respect to ArCHOHCOOH. The yield increases with the increasing of P-CO and of the temperature, as expected, and passes through a maximum with the increasing of the concentration of H2O and of HCl. The proposed catalytic cycle proceeds through the following steps. (i) H2O and CO interact with the metal giving rise to an intermediate having a Pd-COOH moiety, which, upon beta-hydride abstraction, gives off CO2 with formation of a Pd-H species. (ii) The starting substrate is in equilibrium, in the presence of HCl, with the corresponding chloride ArCHClCOOH, which adds to the metal forming an intermediate having a Pd-CH(Ar) COOH moiety. (iii) This species interacts with the hydride yielding the product ArCH2COOH and regenerating the catalyst. The reaction is compared to the closely related catalyzed water gas shift reaction.