We report here that hydroxyphosphine ligands (PO ligands) significantly accelerate nickel-catalyzed cross-coupling reactions of unreactive aryl electrophiles and Grignard reagents. The new catalytic system based on the nickel-PO-Grignard combination allows facile activation of unreactive aryl halides such as fluorides, chlorides, polyfluorides, and polychlorides as well as phenol derivatives such as carbamates and phosphates to give the corresponding cross-coupling products in good to excellent yields. We ascribe the high catalytic activity to a nickel phosphine/magnesium alkoxide bimetallic species that forms from the nickel precatalyst, the PO ligand, and the Grignard reagent and undergoes activation of the aryl-X bond by a cooperative push-pull action of the nucleophilic nickel and Lewis acidic magnesium centers. This mechanistic conjecture was corroborated by kinetic, isotope effect experiments and density functional theory calculations. Being distinct from the conventional three-centered mechanism for oxidative addition, the proposed mechanism for the C-X bond activation offers a new concept for the design of cross-coupling reactions as well as other homogeneous catalyses involving activation of electrophilic substrates.