Palladium(II) complexes promote hydrolytic cleavage of amide bonds in N-acetylhistidylglycine (AcHis-Gly), N-acetylhistidine (AcHis), and their derivatives methylated at the N-1 or N-3 atom of imidazole. Methylation controls coordination of imidazole to palladium(II) and allows stereochemical analysis of the reactions. The complex [PdCl4](2-) regioselectively cleaves the amide bond involving the carboxylic group of histidine, the bond His-Gly; the rate constants of cleavage are virtually the same when the peptides coordinate to palladium(II) via the N-1 and the N-3 atom. The complex [Pd(H2O)(4)](2+) cleaves, at comparable rates, the amide bonds involving both the carboxylic (His-Gly) and the amino (AcHis) groups of histidine in the acetylated dipeptide. This unprecedented reactivity is examined by theoretical calculations in which molecular dynamics and solution of Poisson-Boltzmann equation are combined in a new way. When the Pd(H2O)(3)(2+) group is attached to the N-1 atom, both scissile bonds can be cleaved by internal delivery of aqua ligands. When the Pd(H2O)(3)(2+) group is attached to the N-3 atom, both scissile bonds can be cleaved by internal delivery of aqua ligands and by external attack of water; in some conformers the two modes of cleavage may be combined in the reaction mechanism. In both N-1 and N-3 linkage isomers internal delivery seems to be assisted by weak hydrogen bonding. The rate constants for cleavage by [Pd(H2O)(4)](2+) are approximately 10 times greater than those for cleavage by [PdCl4](2-). This difference is explained semiquantitatively by consideration of the aquation equilibria involving [PdCl4](2-). This study shows that kinetics and regioselectivity of peptide cleavage may be controlled simply by choosing ligands in palladium(II) complexes. This is another step in our development of simple metal complexes as artificial metallopeptidases.