The cyclopalladation of 1,3-bis(2-thioazobenzene)propane (L1H-2) and its methyl substituted derivative L2H-2 affords complexes of the type LPd2Cl2 (where L represents L1 or L2) which have been characterised by spectroscopy and X-ray crystallography. The crystal structure of L1Pd2Cl2 has revealed that each azobenzene fragment along with its thioether sulphur acts in the tridentate (C,N,S) fashion and the fourth coordination position is occupied by a chloride ion. The complexes are thus of type [Pd(C,N,S)Cl]2, with a Pd...Pd contact of 5.420(1) angstrom. The metallated carbon atom exerts a strong trans influence on the Pd-S bond. The reaction of LPd2Cl2 with m-chloroperbenzoic acid leads to smooth oxygen insertion into both the Pd-C bonds to give excellent yields of dinuclear azophenolato complexes o-LPd2Cl2 having the coordination sphere [Pd(O,N,S)Cl]2. The crystal structure of o-L1Pd2Cl2 is similar to that of L1Pd2Cl2 but with a somewhat longer Pd...Pd distance of 5.890(1) angstrom. The insertion reaction has a negative entropy of activation, in keeping with an associative transition state for the electrophilic incorporation of oxygen. Reduction of the azophenolato complexes with hydrazine hydrate affords the free azophenols (o-LH2) in high yields. Thus organometallic route to o-LH2 from LH2 is provided.