Direct arylations of pyridine N-oxide (PyO), a convenient method to prepare 2-arylpyridines, catalyzed by Pd(OAc)(2), and PtBu3 have been proposed to occur by the generation of a PtBu3-ligated arylpalladium acetate complex, (PtBu3)Pd(Ar)(OAc) (1), and the reaction of this complex with PyO. We provide strong evidence that 1 does not react directly with PyO. Instead, our data imply that the cyclometalated complex [Pd(OAc) (tBu(2)PCMe(2)CH(2))](2), which is generated from the decomposition of 1, reacts with PyO and serves as a catalyst for the reaction of PyO with 1. The reaction of PyO with 1 occurs with an induction period, and the reaction of 1 with excess PyO in the presence of [Pd(OAc)-(tBu(2)PCMe(2)CH(2))](2) is zeroth-order in 1. Moreover, the rates of reactions of PyO with bromobenzene catalyzed by [Pd(OAc)(tBu(2)PCMe(2)CH(2))](2) and [Pd(PtBu3)(2)] depend on the concentration of [Pd(OAc)(tBu(2)PCMe(2)CH(2))](2) but not on the concentration of [Pd(PtBu3)(2)]. Finally, the reaction of 1 with a model heteroarylpalladium complex containing a cyclometalated phosphine, [(PEt3)Pd(2-benzothienyl)-(tBu(2)PCMe(2)CH(2))], rapidly formed the arylated heterocycle. Together, these data imply that the rate-determining C H bond cleavage occurs between PyO and the cyclometalated [Pd(OAc)(tBu(2)PCMe(2)CH(2))](2) rather than between PyO and 1. In this case, the resulting heteroarylpalladium complex transfers the heteroaryl group to 1, and C-C bond-formation occurs from (PtBu3)Pd(Ar)(2-pridyl oxide). This mechanism proposed for the direct arylation of PyO constitutes an example of C-H bond functionalization in which C-H activation occurs at one metal center and the activated moiety undergoes functionalization after transfer to a second metal center.