Aryl chlorides undergo efficient, homogeneously catalyzed reductive dechlorination to the corresponding arenes using Pd(dippp)₂ as catalyst [dippp=1,3-bis(diisopropylphosphino) propane], which may be generated in situ from Pd(OAc)₂ and two equivalents of dippp. Two reducing systems are described: (a) sodium hydroxide in methanol; (b) sodium formate in alcohol or DMF. Base-sensitive functional groups (CHO, CN) do not survive the conditions of system (a), but remain unaffected during dechlorination with sodium formate. Various functional groups are tolerated, and high yields are obtained. The reaction rate is retarded by electron-donating substituents, indicating a rate-determining oxidative addition step. Reaction of the model complex (dippp)Pd(Ph)Cl with sodium formate in the presence of dippp leads to the formation of Pd(dippp)₂ and benzene. Dippp homologues are also effective ligands in the catalytic reaction, the reactivity order being dippp> dippb> dippe. Iso-Pr₃P is only marginally effective. A mechanistic interpretation of these observations is given.