The mechanism of the palladium-catalyzed homocoupling of arylboronic acids ArB(OH)(2) (Ar = 4-Z-C6H4 with Z = MeO, H, CN) in the presence of dioxygen, leading to symmetrical biaryls, has been fully elucidated. The peroxo complex (eta(2)-O-2)PdL2 (L = PPh3), generated in the reaction of dioxygen with the Pd(0) catalyst, was found to play a crucial role. Indeed, it reacts with the arylboronic acid to generate an adduct (coordination of one oxygen atom of the peroxo complex to the oxophilic boron atom of the arylboronic acid) characterized by P-31 NMR spectroscopy and ab initio calculations. This adduct reacts with a second molecule of arylboronic acid to generate trans-ArPd(OH)L-2 complexes. A transmetalation by the arylboronic acid gives trans-ArPdArL2 complexes. The biaryl is then released in a reductive elimination. This reaction is at the origin of the formation of biaryls as byproducts in palladium-catalyzed Suzuki-Miyaura reactions when they are not conducted under oxygen-free atmosphere.