Reaction between equimolar amounts of trans-[PdCl(PPh₃)₂(CNR)][BF₄] (R = t-Bu 1, Xyl 2) and diisopropylammonium azide 3 gives the tetrazolate trans-[PdCl(PPh₃)₂(CN₄t-Bu)] (67%, 4) or trans-[PdCl(PPh₃)₂(CN₄Xyl)] (72%, 5) complexes. 4 and 5 were characterized by elemental analyses (C, H, N), HRESI⁺-MS, ¹H and ¹³C{¹H} NMR spectroscopies. In addition, the structure of 4 was elucidated by a single-crystal X-ray diffraction. DFT calculations showed that the mechanism for the formal cycloaddition (CA) of N₃^- to trans-[PdCl(PH₃)₂(CNMe)]⁺ is stepwise. The process is both kinetically and thermodynamically favorable and occurs via the formation of an acyclic NNNCN-intermediate. The second step of the formal CA, i.e. cyclization, is rate limiting. Despite the fact that the substitution of CNMe by the N₃^- ligand is slightly thermodynamically favorable, we were unable to find paths on the potential energy surface for hypothetical CA between uncomplexed isocyanide and palladium-bound azide. Thus, we believe that the experimentally observed palladium tetrazolate complexes are, in fact, generated from the negatively charged uncomplexed azide and the positively charged metal-bound isocyanide species, and this reaction path is favorable from the viewpoint of Coulomb attraction.