Gradient-corrected density functional theory has been used to study ethylene and propene polymerization catalyzed by N boolean AND N-Pd-II diimine complexes with N boolean AND N = -NHCHCHNH- as a model ligand. Calculations have been carried out on the [N boolean AND N-(PdR)-R-II{eta(2)-CH2CHR'}](+) polymerization precursor olefin complex (1; R' = H, CH3) as well. as the alkyl insertion product [N boolean AND N-(PdR)-R-II "](+) (2) with the alkyl chain R containing a primary, secondary, or tertiary alpha-carbon. Both 1,2- and 2,1-insertions were considered for propene. The transition state TS (1,2) and the corresponding activation energies were determined for each investigated insertion process. Propene was found to prefer 2,1- over 1,2-insertion in all cases. The propene insertion barriers are higher than those of ethene and increase from 1 with R containing a primary alpha-carbon to R containing a tertiary alpha-carbon. Also considered was the isomerization process N boolean AND N-(PdR)-R-II " (2) --> N boolean AND N-(PdR)-R-II''' (2') by a beta-hydrogen transfer process of the initial insertion product (2). A chain-straightening isomerization reaction following the 2,1-insertion toward alkyl groups (R''') with reduced substitution of the alpha-carbon is not favorable. The relative stability of the isomers N boolean AND N-(PdR)-R-II''' (2') follows the corresponding relative stability of the R''' radicals and would favor alkyl products with a high substitution on the alpha-carbon. However, the final distribution of the N boolean AND N-(PdR)-R-II''' (2') products is also determined by the polymerization precursor olefin complex [N boolean AND N-(PdR)-R-II{eta(2)-CH2CHR'}](+) (1), for which steric factors favor low substitution at the alpha-carbon.