Quantum mechanics (B3LYP density functional theory) combined with solvation (Poisson-Boltzmann polarizable continuum solvent model) was used to investigate six mechanisms for the aerobic oxidation of alcohols catalyzed by (NHC) Pd(carboxylate)(2)(H2O) complexes (NHC) 1,3-bis(2,6-diisopropylphenyl)imidazol-2-ylidene). Of these, we find that "reductive, beta-hydride elimination", in which the, beta-hydrogen of a palladium-bound alkoxide is transferred directly to the free oxygen of the bound carboxylate, provides the lowest-energy route and explains the published kinetic isotope effect, activation enthalpy, reaction orders, and dependence of rate on carboxylate p K a. The traditional, beta-hydride elimination mechanism cannot be responsible for the experimentally observed kinetic parameters, which we find could result from the subsequent reductive elimination of acetic acid, which yields a slightly higher calculated activation barrier. Reversible, beta-hydride elimination may provide a mechanism for the racemization of chiral alcohols, which would undermine attempts at an enantioselective oxidation. Competition among these pathways can be influenced by changing the electronic properties of the carboxylate and substrate.