A combined experimental and theoretical study has demonstrated that [Ru(eta(5)-C5H5)(py)(2)(PPh3)]+ is a key intermediate, and active catalyst for, the formation of 2-substituted E-styrylpyridines from pyridine and terminal alkynes HC CR (R = Ph, C6H4-4-CF3) in a 100% atom efficient manner under mild conditions. A catalyst deactivation pathway involving formation of the pyridylidene-containing complex [Ru(eta(5)-C5H5)(kappa(3)-C-3-C5H4NCH=CHR)(PPh3)](+) and subsequently a 1-ruthanaindolizine complex has been identified. Mechanistic studies using C-13- and D-labeling and DFT calculations suggest that a vinylidene-containing intermediate [Ru(eta(5)-C5H5)-(py)(=C=CHR)(PPh3)](+) is formed, which can then proceed to the pyridylidene-containing deactivation product or the desired product depending on the reaction conditions. Nucleophilic attack by free pyridine at the alpha-carbon in this complex subsequently leads to formation of a C-H agostic complex that is the branching point for the productive and unproductive pathways. The formation of the desired products relies on C-H bond cleavage from this agostic complex in the presence of free pyridine to give the pyridyl complex [Ru(eta(5)-C5H5)(C5H4N)(=C=CHR)(PPh3)]. Migration of the pyridyl ligand (or its pyridylidene tautomer) to the a-carbon of the vinylidene, followed by protonation, results in the formation of the 2-styrylpyridine. These studies demonstrate that pyridylidene ligands play an important role in both the productive and nonproductive pathways in this catalyst system.