The complex [Ir(mu-OCH3)(eta4-1,5-COD)]2 (1) reacts in methanol with dppm (bis(diphenylphosphino)-methane) to give [IrH(eta1,eta3-C8H12)(dppm)] (2). The molecular structure of this compound has been determined by X-ray investigation. 2 crystallizes in the space group P2(1)/n with a = 10.406 (1) angstrom, b = 17.703 (3) angstrom, c = 15.894 (2) angstrom, and beta = 102.15 (1)-degrees. The coordination geometry about the iridium center can be rationalized as a distorted octahedron with the phosphorus atoms of the dppm ligand, one terminal allyl carbon atom, and the C-Ir carbon atom forming the equatorial plane. The apical positions are occupied by the other terminal allyl carbon atom, and the hydride ligand. The reaction of [Ir(mu-OCD3)(eta4-1,5-COD)]2 (1-d6) with dppm in methanol-d4 leads to 2-d3. Two of the three deuterium atoms of 2-d3 are located on the methylene group of the diphosphine ligand, and the other on one of the two carbon atoms bonded to the C-Ir carbon atom of the carbocyclic ligand. On the basis of this result and other considerations, a mechanism for the formation of 2 is proposed. 2 is formed via the intermediate [IrH(eta4-1,5-COD)(dppm)] which evolves to [Ir(eta3-C8H13)(dppm)] by hydride transfer from the metal to an olefin group of the coordinated diolefin, and subsequent double-bond migration. The last step is the intramolecular C-H (sp3) activation of one of the two C-H bonds on the carbon atom that is equidistant from the terminal allyl atoms of the carbocyclic ligand of [Ir(eta3-C8H13)(dppm). 2 reacts with electrophiles and nucleophiles; the reaction with HBF4 leads to cis-[IrH2(eta4-1,5-COD)(dppm)]BF4 (13), while in the presence of CO and P(OMe)3 the compounds [Ir(eta1,eta2-C8H13)(dppm)L] (L = CO (14), P(OMe)3 (15)) are obtained.