Pentafluoroiodosylbenzene (C6F5IO) selectively oxidizes Pd-C bonds of a series of cyclopalladated 2-(alkylthio)azobenzene complexes. The kinetics of oxygen atom insertion into the Pd-C bond of one representative compound has been studied in detail to understand the mechanism of this reaction. At 20 degrees C Pd-C bond oxidation takes place smoothly in acetonitrile at a rate of 0.08 M-1 s(-1), whereas this reaction does not proceed in solvents such as dichloromethane and chloroform. The Delta H double dagger and Delta S double dagger values for this reaction are 55.5 +/- 3.5 kJ/mol and -75.7 +/- 11.5 eu, respectively. Among other oxidants, hydroperoxy radical (for example, t-BuOO.) is found to be extremely efficient, whereas the highly electrophilic oxoiron(IV) porphyrin cation radical (oxene) is incapable of oxidizing the Pd-C bond. Oxene, however, selectively oxidizes the thioether functionality. These observations suggest that nucleophilic attack of the oxidant molecule on palladium(II) could be the most crucial step prior to Pd-C bond oxidation. A large negative value of Delta S double dagger supports an associative mechanism, and a smooth reaction in polar solvent supports a polar intermediate structure. Hydroperoxides, in the presence of a catalytic amount of iron(III) porphyrin chloride, selectively oxidizes the Pd-C bond. This observation, coupled with the fact that oxene oxidizes the thioether functionality, indicates that oxene may not be the major reactive intermediate in hydroperoxide oxidations. On the basis of these experimental results, we have attempted to draw a plausible mechanism of Pd-C bond oxidation.