Reaction of 7-octene-2,4-dione (3) with a catalytic amount of PdCl2(CH3CN)(2) (4) (10 mol %) in dioxane at room temperature for 16 h formed 2-acetylcyclohexanone (5) in 81% yield as a single regioisomer. Byproducts in the conversion of 3 to 5 include 2.4-octanedione (13), 2-acetyl-2-cyclohexenone (14), 2-acetylphenol (15), (E)- and (Z)-6-octene-2.4-dione (17). (E)and (Z)-5-octene-2,4-dione (18), the eta(3)-beta-diketonate chloride dimer {[eta(3)-CH3CH2-CHCOHCHAc]Pd(Cl)}(2) (12), and the pi(allyl)palladium chloride dimer {[eta(3)-CH3CHCHCHC(0)CH2Ac]Pd(Cl)}(2) (16). The palladium-catalyzed cyclization of 3-butenyl beta-diketones tolerated substitution at the terminal acyl carbon atom, the enolic carbon atom, and the terminal olefinic carbon atom. Deuterium-labeling studies, in conjunction with kinetic and in situ NMR experiments, supported a mechanism for the palladium-catalyzed hydroalkylation of 3-butenyl beta-diketones initiated by 6-endo-trig attack of the enol carbon atom on a palladium-complexed olefin to form a palladium cyclohexanone species. Migration of the palladium atom from the C(4) to the C(6) carbon atom of the 2-acylcyclohexanone intermediate via iterative beta-hydride elimination/addition followed by protonolysis of the resulting palladium C(6)-enolate complex released the cyclohexa-none and regenerated the palladium dichloride catalyst.