Within a dynamical model, rescattering effects are studied in coherent pion photoproduction on the deuteron in the ∆(1232) resonance region. The model consists of a system of coupled equations for the N∆, NNπ and NN channels. Pion rescattering leads in general to a significant reduction of total and differential cross sections resulting in a better description of experimental data. Only a few polarization observables are sensitive to rescattering effects.In particular T 20 allows an analysis of the reaction mechanism for specific kinematics. The question how rescattering affects the sensitivity to the E2 excitation of the ∆ resonance is also studied. PACS numbers: 13.60. Le, 21.45.+v, 25.20.Lj Typeset using REVT E X * Supported by the Deutsche Forschungsgemeinschaft (SFB 201)