Two series of new dicyclopalladated complexes {(DMF)PdCl(mu-(RC6H3N)-C-1=NC6H3R2)PdCl(DMF)} of 4,4'-functionalized azobenzenes with substituents of varying electron-donating or electron-withdrawing strength (R-1 = H, NMe2; R-2 = H, Cl, Br, I, OMe, PhNH, CO2H, SO3Na, or NO2) have been synthesized and fully characterized. H-1 NMR spectroscopy along with the ESI mass spectrometry unambiguously identified the new complexes in the solution, and their solid-state structures were determined by X-ray crystallography. The presence of easily exchangeable solvent ligands was confirmed by H-1 NMR spectroscopy, X-ray experiments, and ESI mass spectrometry. The complexes were additionally characterized by UV-vis and fluorescence spectroscopies. The effect of different 4,4'-substituents on the formation rate of mono- and dicyclopalladated azobenzenes was studied by UV-vis spectroscopy. The experimental results are complemented by the quantum-chemical (DFT) calculations in order to rationalize the kinetic results as well as substituent effects on the reaction rates. It was found that the mono- and dicyclopalladation reactions of azobenzenes proceed in two consecutive processes, adduct formation and palladation steps. The rate-determining step in both palladations is the breaking of the ortho C-H bond, which has been confirmed as an electrophilic substitution process by Hammett correlations and DFT calculations.