Computational studies have been applied to gain insight into the mechanism of Pd(ii) catalyzed α-C-H functionalization of N-methoxy cinnamamide. The results show that the whole catalytic cycle proceeds via sequential six steps, including (i) catalyst Pd(t-BuNC)2 oxidation with O2, (ii) O-H deprotonation, (iii) t-BuNC migratory insertion to the Pd-C bond, (iv) acyl migration, (v) C-H activation and (vi) reductive elimination. The regioselectivity for different C-H activation sites depends on the coordination structures of α-C or β-C to the palladium(ii) center. The coordination of α-C to the palladium(ii) center shows a regular planar quadrilateral structure, which is stable. However, the β-C coordinating to the palladium(ii) center mainly exhibits a distorted quadrilateral structure, which is relatively unstable. Thus, the barrier of α-C-H activation is much lower than that of β-C-H activation. The present results provide a deep understanding of the site-selectivity of C-H activation.