Ligand effects in bimetallic high oxidation state systems containing a X-Pd-Pd-Y framework have been explored with density functional theory (DFT). The ligand X has a strong effect on the dissociation reaction of Y to form [X-Pd-Pd](+) + Y-. In the model system examined where Y is a weak sigma-donor ligand and a good leaving group, we find that dissociation of Y is facilitated by greater sigma-donor character of X relative to Y. We find that there is a linear correlation of the Pd-Y and Pd-Pd bond lengths with Pd-Y bond dissociation energy, and with the sigma-donating ability of X. These results can be explained by the observation that the Pd d(z2) population in the PdY fragment increases as the donor ability of X increases. In these systems, the Pd-III-Pd-III arrangement is favored when X is a weak sigma-donor ligand, while the Pd-IV-Pd-II arrangement is favored when X is a strong sigma-donor ligand. Finally, we demonstrate that ligand exchange to form a bimetallic cationic species in which each Pd is six-coordinate should be feasible in a high polarity solvent.