The Pd-catalyzed transformation of N-phthaloyl hydrazones into nitriles involving the cleavage of an N-N bond is reported. The use of N-heterocyclic carbene as a ligand is essential for the success of the reaction. N-Phthaloyl hydrazones prepared from aromatic aldehydes or cyclobutanones are applicable to this transformation, which gives aryl or alkenyl nitriles, respectively.