The unique reactivity profile of the dinuclear PdI complex [PdI(µ-Br)tBu3P]2 as an isomerization co-catalyst has enabled orthogonal tandem processes ranging from styrene syntheses to biodiesel refining. We have now elucidated the mechanistic basis of its distinct catalytic profile by DFT calculations and experimental studies. Activation of the catalyst proceeds intramolecularly, giving rise to a dinuclear complex composed of a reactive palladium hydride and an inert palladacycle. This complex mediates double-bond migrations with an energy span of 9.5 kcal/mol, which is well below those calculated for known catalysts. Its dissociation leads to an even more active monophosphinopalladium hydride catalyst and an inert dinuclear bispalladacycle. In the main deactivation pathway, two mononuclear Pd species react with each other, liberating a hydrogenation product and regenerating the catalyst precursor [PdI(µ-Br)tBu3P]2. The experimentally observed build-up of dinuclear palladacycles during the catalysis is, thus, the result of a conversion of binuclear into mononuclear Pd–H catalyst. Phosphines, which would deactivate metathesis co-catalysts, are not liberated at any stage. This explains the unique suitabil-ity of [PdI(µ-Br)tBu3P]2 for isomerizing metatheses. The mechanistic insights were used for the in silico casting of a catalyst generation, targeting complexes with a reduced barrier towards the formation of dinuclear Pd–H species, a low energy span of the catalytic cycles, and increased barriers either towards deactivation or, alternatively, towards dissociation to short-lived mononuclear complexes. Complexes with bisadamantyl-n-butylphosphine ligands were identified as lead structures. Exper-imental studies with model catalysts confirmed the validity of the predicted structure-activity relationship.