The palladium-catalyzed conversion of (bio)pentenoic acid isomers (PEAs) occurs with high activity and selectivity to adipic acid (ADA) in the presence of the diphosphine ligand L 2 = 1,2-bis[(di-tert-butyl)phosphinomethyl]benzene (DTBPX) and an acid cocatalyst. Using density functional theory (DFT) calculations, we show that the active catalyst ([L 2 Pd II -H] + ) isomerizes the PEAs to their equilibrium mixture, from which selective carbonylation and hydrolysis results in the ADA product. Hydrolysis is the rate-limiting and also selectivity-determining step, consisting of two parts, hydration and "product release". After the separation of ADA from Pd(0), the product is in a hydrate form. The conversion of this Pd(0) species to the active catalyst occurs quickly with an acid cocatalyst. This conclusion is also supported by the experimental finding that a moderate acidity increases the overall reaction rate. The bulky P substituents in the DTBPX ligand largely prevent chelation of the pending COOH moiety of PEAs, thus allowing the same high regioselectivity as is obtainable with unfunctionalized long-chain alkenes. We also modeled the CO insertion into the chelate complexes and confirmed an increase of more than 50 kJ mol −1 in the barrier for their conversion.