Sulfur ylide complexes of palladium were prepared under basic phase-transfer catalysis. Increasing the amount of phase-transfer catalyst enhanced the rates of formation of the complexes. The optimal range of base concentration was found to be 1.0‒2.0 N. The proposed role of the phase-transfer catalyst is to carry OH‒ into the organic layer and to prevent the ylide from abstracting a proton from water present in the organic phase. The single-crystal structures of {Pd(PPh3)2[(CH2)2S(O)(CH3)]}I and Pd(PPh3)(I)-[(CH2)2S(O)(CH3)] were determined. The former crystallized in the monoclinic space group P21/n, with a = 11.337 (2) Å, b = 21.954 (3) Å, c = 15.406 (2) Å, β = 94.30 (1)°, V = 3823.6 Å3, Z = 4, and R = 0.095 for 4906 observed reflections. The latter crystallized in the orthorhombic space group P212l2l, with a = 9.691 (3) Å, b = 14.579 (2) Å, c = 15.642 (3) Å, V = 2209.9 Å3, Z = 4, and R = 0.078 for 2201 observed reflections. Both compounds have rather short ylidic S‒C bonds (1.60-1.70 Å). © 1990, American Chemical Society. All rights reserved.