Oxidative addition of the tridentate N-heterocyclic carbene (NHC) diphosphine ligand precursor ([PCP]H)PF6 (1) {[PCP] = o-(Pr2PC6H4)-Pr-i(NC3H4N)o-(C6H4PPr2)-Pr-i} to Ni(COD)(2) results in the formation of the nickel(II) hydride complex ([PCP]NiH)PF6 (2). This hydride undergoes a rapid reaction with ethylene to generate a nickel(O) complex in which an ethyl group has been transferred to the carbene carbon of the original NHC-diphosphine ligand. If the first intermediate is the anticipated square-planar nickel(II) ethyl species, then the formation of the product would require a process that involves a trans C-C coupling of the NHC carbon and a presumed Ni-ethyl intermediate. Deuterium-labeling studies provide evidence for migratory insertion of the added ethylene into the Ni-H bond rather than into the Ni-catene linkage; this is based on the observed deuterium scrambling, which requires reversible P-elimination, alkene rotation, and hydride readdition. However, density functional theory studies suggest that a key intermediate is an agostic ethyl species that has the Ni-C bond cis to the NHC unit. A possible transition state containing two cis-disposed carbon moieties was also identified. Such a process represents a new pathway for catalyst deactivation involving NHC-based metal complexes.