[Pd I 2(μ-PPh 2)(μ 2-OAc)(PPh 3) 2] is the reduction product of Pd II(OAc) 2(PPh 3) 2, generated by reaction of ‘Pd(OAc) 2’ with two equivalents of PPh 3. Here, we report that the reaction of [Pd I 2(μ-PPh 2)(μ 2-OAc)(PPh 3) 2] with PPh 3 results in a nuanced disproportionation reaction, forming [Pd 0(PPh 3) 3] and a phosphinito-bridged Pd I-dinuclear complex, namely [Pd I 2(μ-PPh 2){κ 2-P,O-μ-P(O)Ph 2}(κ-PPh 3) 2]. The latter complex is proposed to form by abstraction of an oxygen atom from an acetate ligand at Pd. A mechanism for the formal reduction of a putative Pd II disproportionation species to the observed Pd I complex is postulated. Upon reaction of the mixture of [Pd 0(PPh) 3] and [Pd I 2(μ-PPh 2){κ 2-P,O-μ-P(O)Ph 2}(κ-PPh 3) 2] with 2-bromopyridine, the former Pd 0 complex undergoes a fast oxidative addition reaction, while the latter dinuclear Pd I complex converts slowly to a tripalladium cluster, of the type [Pd 3(μ-X)(μ-PPh 2) 2(PPh 3) 3]X, with an overall 4/3 oxidation state per Pd. Our findings reveal complexity associated with the precatalyst activation step for the ubiquitous ‘Pd(OAc) 2’/nPPh 3 catalyst system, with implications for cross-coupling catalysis.