The mechanism of C-O bond cleavage of allylic alcohols promoted by the hydridopalladium complexes PdH(OTf)(DPCB-Y) (2), bearing 1,2-diaryl-3,4-bis[(2,4,6-tri-tert-butylphenyl)-phosphinidene]cyclobutene ligands (DPCB-Y), has been investigated (aryl = 4-(trifluoro-methyl)phenyl (DPCB-CF3), phenyl (DPCB), 4-methoxyphenyl (DPCB-OMe), 4-octyloxyphenyl (DPCB-OOct)). This reaction forms the (pi-allyl)palladiuin complexes [Pd(pi-allyl)(DPCB-Y)]-OTf 1 (1), which are key intermediates for the catalytic allylation of aniline with allylic alcohols. The platinum analogue of 2 is obtained as the hydrido-bridged dimer [Pt-2(mu-H)(2)(DPCB)(2)]-(OTf)(2) (4) by the treatment of PtMe(OTf)(DPCB) (5) with HSiMe2Ph in the presence of a small amount of water. Complex 4 cleaves the C-O bond of allylic alcohols at 50 degreesC, yielding the pi-allyl complexes [Pt(pi-allyl)(DPCB)]OTf (7). Although complex 2, similarly prepared by the reaction of PdMe(OTf)(DPCB) (5) with HSiMe2Ph and water, is too unstable to be identified, its formation is confirmed by trapping experiments using dienes to give the corresponding :T-allyl complexes. Complex 2, thus generated, instantly reacts with allylic alcohols at room temperature to afford the pi-allyl complex I in high yield. The intermediacy of 2 in the catalytic allylation is further examined by kinetic experiments on actual catalytic systems, leading to mechanistic details of C-O bond cleavage promoted by 2.