Reaction paths leading to palladium catalyst deactivation during cyanation of haloarenes (eq 1) have been identified and studied. Each key step of the catalytic loop (Scheme 1) can be disrupted by excess cyanide, including ArX oxidative addition, X/CN exchange, and ArCN reductive elimination. The catalytic reaction is terminated via the facile formation of inactive [(CN) 4Pd]2-, [(CN)3PdH]2-, and [(CN) 3PdAr]2-. Moisture is particularly harmful to the catalysis because of facile CN- hydrolysis to HCN that is highly reactive toward Pd(0). Depending on conditions, the reaction of [(Ph 3P)4Pd] with HCN in the presence of extra CN- can give rise to [(CN)4Pd]2- and/or the remarkably stable new hydride [(CN)3PdH]2- (NMR, X-ray). The X/CN exchange and reductive elimination steps are vulnerable to excess CN- because of facile phosphine displacement leading to stable [(CN)3PdAr] 2- that can undergo ArCN reductive elimination only in the absence of extra CN-. When a quaternary ammonium cation such as [Bu 4N]+ is used as a phase-transfer agent for the cyanation reaction, C-N bond cleavage in the cation can occur via two different processes. In the presence of trace water, CN- hydrolysis yields HCN that reacts with Pd(0) to give [(CN)3PdH]2-. This also releases highly active OH- that causes Hofmann elimination of [Bu 4N]+ to give Bu3N, 1-butene, and water. This decomposition mode is therefore catalytic in H2O. Under anhydrous conditions, the formation of a new species, [(CN)3PdBu]2-, is observed, and experimental studies suggest that electron-rich mixed cyano phosphine Pd(0) species are responsible for this unusual reaction. A combination of experimental (kinetics, labeling) and computational studies demonstrate that in this case C-N activation occurs via an SN2-type displacement of amine and rule out alternative 3-center C-N oxidative addition or Hofmann elimination processes. © 2008 American Chemical Society.