Benzoyl azides, ArC(O)N3, 2, (Ar = phenyl or substituted phenyl), react with [Pd2Cl2(dppm)2], 1, [dppm = bis(diphenylphosphino)methane] with the formation of novel [Pd2Cl2(mu-NC(O)Ar)(dppm)2], 3, benzoylnitrene complexes that were structurally characterised by multinuclear magnetic resonance and IR spectroscopy and, in several instances, by single crystal X-ray diffraction. As shown by crystallographic studies, the C2P4Pd2 rings adopt extended twist-boat conformations with methylene groups bending towards the bridging benzoylimido moieties. X-ray diffraction studies have revealed the chiral nature of the imido complexes, the chiral element being the propeller-like C2P4Pd2 ring. Structural data accumulated on complexes 3 such as short C-N distances (1.32 A), elongated C=O bonds (1.30 A) as well as the outstandingly high barrier to internal rotation around the N-C(O) linkage (88.3 kJ mol(-1)) are in line with extensive ppi-ppi interaction between the bridging nitrogen and the carbonyl carbon atoms. Theoretical calculations indicate an electron shift from the dimer towards the apical nitrogen atom, which, in turn, facilitates the donation of electrons towards the carbonyl moiety. To elucidate the structure-reactivity relationship of benzoyl azides towards 1, crystallographic and solution IR spectroscopic studies were carried out on a series of para-substituted benzoyl azides. The reaction obeys the Hammett equation. The large positive value of the reaction constant indicates that the azides act as electrophiles in the reaction studied. The enhanced reactivity of 2-nitrobenzoyl azide has been attributed to a decreased conjugation of the phenyl and carbonyl moieties in this reagent.