The reaction of molecular oxygen with a Pd-II-hydride species to form a Pd-II-hydroperoxide represents one of the proposed catalyst reoxidation pathways in Pd-catalyzed aerobic oxidation reactions, but well-defined examples of this reaction were discovered only recently. Here, we present a mechanistic study of the reaction Of O-2 with trans-(IMes)(2)Pd(H)(OBz), 1 (IMes = 1,3-dimesitylimidazol-2-ylidene), which yields trans-(IMes)(2)Pd(OOH)(OBz), 2. The reaction was monitored by H-1 NMR spectroscopy in benzene-d(6), and kinetic studies reveal a two-term rate law, rate = k(1)[1] + k(2)[1][BzOH], and a small deuterium kinetic isotope effect, k(Pd-H)/k(Pd-D) = 1.3(1). The rate is independent of the oxygen pressure. The data support a stepwise mechanism for the conversion of 1 into 2 consisting of rate-limiting reductive elimination of BzOH from 1 followed by rapid reaction of molecular oxygen with (IMeS)(2)Pd degrees and protonolysis of a Pd-O bond of the n(2)-peroxo complex (IMeS)(2)Pd(O-2). Benzoic acid and other protic additives (H2O, ArOH) catalyze the oxygenation reaction, probably by stabilizing the transition state for reductive elimination of BzOH from 1. This study provides the first experimental validation of the mechanism traditionally proposed for aerobic oxidation of Pd-hydride species.