Density functional theory calculations were applied to investigate the P-hydrogen-elimination of the ethyl-palladium complexes, cis-(Me3P)(2)(Et)PdHX, where X = Cl, Br or 1, to form ethene and hydrido-palladium complexes. Effects of substitution of halogen ligands and coordination of solvent molecules on geometric parameters and energies were investigated. Studies on solvated reaction intermediates revealed the agostic ethyl-palladium complexes to be important in the decomposition processes of the ethyl-palladium complexes. (c) 2004 Elsevier B.V. All rights reserved.