The diphosphine 1,3-bis[(di-tert-butylphosphino)methyl]-2,4,6-trimethylbenzene (la) upon reacting with the rhodium and iridium olefin complexes M(2)(olefin)(4)Cl-2 (M = Rh, Ir) undergoes rapid, selective metal insertion into the strong unstrained aryl-methyl bond under very mild conditions (room temperature), yielding CIM(CH3)-[C6H(CH3)(2)(CH2P(t-Bu)(2))(2)] (M = Rh (4a), Ir (7a)). The carbon-carbon bond activation is competitive with a parallel C-H activation process, which results in formation of complexes ClMH(L)[CH2C6H(CH3)(2)(CH2P(t-Bu)(2))(2)] (M = Rh (3a), Ir (6a); L = cyclooctene inthe case of 6a and is absent in 3a). Complexes 3a and 6a undergo facile C-H reductive elimination (at room temperature (3a) or upon moderate heating (6a)), followed by C-C oxidative addition, resulting in clean formation of 4a and 7a, respectively. The C-C bond activation products are stable under the reaction conditions, demonstrating that this process is the thermodynamically favorable one. X-ray single-crystal analysis of 4a demonstrates that the rhodium atom is located in the center of a square pyramid, with the methyl group occupying the position trans to the vacant coordination site. Direct kinetic comparison of the C-C and C-H activation processes shows that-in contrast to theoretical calculations-metal insertion into the carbon-carbon bond in this system is not only thermodynamically but also kinetically preferred over the competing insertion into the carbon-hydrogen bond. When the Ligand 1,3-bis[(di-tert-butylphosphino)methyl]-2,4, (Ib), bearing the strong electron-donating methoxy group in the position trans to the Ar-CH3 bond to be cleaved, was used instead of la, no effect on the reaction rate or on the ratio between the C-H and C-C activation products was observed. Our observations indicate that the C-C oxidative addition proceeds via a three-centered mechanism involving a nonpolar transition state, similar to the one proposed for C-H activation of hydrocarbons. An eta(2)-arene complex is not involved in the C-C activation process.