We have developed a catalytic allylic amination involving tertiary aminoesters and allylcarbonates, which is the first example of the use of tertiary amines as intermolecular nucleophiles in metal-catalyzed allylic substitution chemistry. This process is employed in a tandem ammonium ylide generation/[2,3]-rearrangement reaction, which formally represents a palladium-catalyzed Stevens rearrangement. Low catalyst loadings and mild reaction conditions are compatible with an unprecedented substrate scope for the ammonium ylide functionality, and products are generated in high yields and diastereoselectivities. Mechanistic studies suggested the reversible formation of an ammonium intermediate.