To analyze the mechanism of the β-hydrogen elimination process of η³-1,1-dimethylallylpalladium compounds, we assumed the plausible intermediates and transition states for composing the possible pathways. Their geometry optimization, and vibrational frequencies and energy calculations were carried out with density functional theory (DFT) at the B3LYP level. The most suitable pathway was that in which the allylic ligand transformed from η³- to η¹-allyl form having agnostic interaction between β-hydrogen and palladium atoms, and succeeding elimination of β-hydrogen gave 2-methyl-1,3-butadiene moiety with low activation energy (9.76 kcal/mol).