The cycloisomerization of enynes catalyzed by Pd(OAc)2 and bis-benzylidene ethylenediamine (bbeda) is a landmark methodology in transition-metal-catalyzed cycloisomerization. However, the mechanistic pathway by which this reaction proceeds has remained unclear for several decades. Here we describe mechanistic investigations into this reaction using enynamides, which deliver azacycles with high regio- and stereocontrol. Extensive 1H NMR spectroscopic studies and isotope effects support a palladium(II) hydride-mediated pathway and reveal crucial roles of bbeda, water, and the precise nature of the Pd(OAc)2 pre-catalyst. Computational studies support these mechanistic findings and lead to a clear picture of the origins of the high stereocontrol that can be achieved in this transformation, as well as suggesting a novel mechanism by which hydrometalation proceeds.