NBO calculations are consistent with a large ionic contribution to the bonding based on the large amount of charge separation with positive charges on the main group atoms (>1.5) and negative charges on the hydrides (< -0.3). To a first approximation these species can be formalised as containing [NiH4] To gain further insight into the mechanism of H2 activation by 1 a series of pathways were calculated by DFT. Both associative and dissociative mechanisms were considered. The HOMO of 1 is mainly composed of the Pd dz2 orbital, lying perpendicular to the tetrahydride plane. Although this has the appropriate orientation and symmetry to interact with H2 in an associative step, calculations did not lead to identification of any clear minima for the hydrogen adduct of 1 (1-H2) on the potential energy surface. In contrast, a dissociative mechanism for H2 splitting was calculated to be a facile and reversible process. Hence, dissociation of an equiv. of 2 from 1 is calculated to form Int-1 with a small energy cost (Gº298K = 10.3 kcal mol - 1 ). This process occurs with a shift in the bonding of 1 along the continuum from hexagonal planar toward trigonal planar, strengthening the Mg---H interactions in the equatorial plane, and pre-organising the complex for dissociation of an equivalent of 2. Similarly coordinatively unsaturated intermediates were recently described in related systems for the zincation of C-H bonds. Association of H2 generates the dihydrogen complex Int-2 with subsequent H2 activation occurring by a ligand-assisted oxidative addition through TS-1 (G ‡ 298K = 13.6 kcal The calculated mechanism bears some resemblance to a s-complex assisted metathesis pathway. H2 addition to a Ni complex related to 1 has been calculated to occur by a sbond metathesis pathway. Despite these precedents, NBO analysis of key intermediates is consistent with the assignment as a ligand-assisted oxidative addition. Throughout the pathway the NPA charge on Pd becomes more positive (Int-1 = -0.37; Int-2 = -0.17; TS-1 = -0.16; Int-3 = -0.07; TS-2 = -0.05) suggestive of an increase in formal oxidation state of the transition metal on addition of H2. The Wiberg Bond Index (WBI) of the breaking H 1 ---H 2 bond is 0.82 in Int-2 and 0.45 in TS-1. The involvement of both the Pd and a Mg centre in this transition state is supported by NBO calculations which show a charge asymmetry across the dihydrogen unit (H 1 = -0.21; H 2 = 0.12) along with a small but significant H 1 ---Mg interaction characterised by a WBI of 0.09. Ligand-assisted oxidative addition is increasingly recognised as a mechanism of importance for heterometallic complexes. Previous calculations have suggested this mechanism may be in operation for addition of C-F to Pd---Mg complexes and H2 addition to Ru-Zn complexes. The proposed mechanism of H2 activation by 1 involves both breakage and formation of H-H and Mg-H bonds in the equatorial plane and strongly suggests that the activation of both these types of bonds is possible at the same transition metal centre. This idea was further exploited through the development of a catalytic protocol for H/D-exchange. In summary, we report a rare example of reversible H2 activation at a palladium complex bearing Mg-based metalloligands. The product of H2 addition is an unusual tetrahydride complex of palladium containing a PdH 4 Mg 2 core, and analogous PtH 4 Mg 2 and PtH 4 Zn 2 containing species were isolated by independent synthesis. DFT calculations support a dissociative mechanism in which, following generation of a coordinatively unsaturated intermediate, H2 splitting occurs by ligand-assisted oxidative addition. These findings were used to develop a simple approach to catalytic H/D-exchange into main group hydrides using D2; a reaction that may have wide synthetic applications giving the utility of these reagents and scarcity of suitable methods (and deuterium sources) for preparation of isotopically labelled analogues.