Copolymerisation of olefins and carbene monomers was attempted with several well-defined Pd catalysts active in both olefin polymerisation and carbene polymerisation. In none of the attempts copolymer formation or even formation of the homopolymers was observed. This indicates that olefin polymerisation and carbene polymerisation are incompatible, despite the fact that the proposed transition states for these processes are very similar. Detailed investigations of Pd catalysed homopolymerisation of carbenes using both Pd^II and Pd⁰ complexes revealed that the active species in these reactions are most likely low-valent Pd species rather than Pd^II–alkyl species generally assumed to mediate carbene polymerisation. Well-defined Pd^II–alkyl species showed only a few insertions of carbene monomers, while longer oligomers (∼20 carbene units) are formed from Pd⁰ salts. In agreement with previous investigations, Pd⁰–NHC complexes allow formation of higher-M_w materials. Activation of the catalyst by NaBPh₄ is required. Mechanistic studies revealed that involvement of Pd^II species in this process is highly unlikely, but the exact nature of the low-valent active species (Pd nanoparticles, molecular Pd⁰ or Pd^I species) is not clear. However, involvement of free radical species can be ruled out. Since olefin polymerisation requires Pd^II as the active species, the likely involvement of lower-valent Pd species in carbene polymerisation explains the incompatibility of both processes. The absence of formation of olefin homopolymers by well-known Pd-based olefin polymerisation catalysts in the presence of EDA can be explained by in situ reduction of the Pd^II species by EDA.