Vinylacetate can be formed in the homogeneous reaction of ethylene with palladium acetate in glacial acetic acid. We propose a Wacker-like mechanism, which has been studied using density functional theory computational methods. The palladium acetate dimer, which is presumably the active catalyst, has been modeled by clusters of two palladium ions coordinated by acetate ligands. The active site is formed by a single palladium ion which is part of the dimer. In this mechanism, ethylene coordinates to palladium by substitution of a terminal acetate. Next, the ligand couples with an acetate ion, and consecutive beta-hydrogen transfer forms the product vinyl acetate. The coupling probably takes place via an outer sphere attack by acetate. Theory suggests that the rate-determining step is the beta-hydrogen transfer, and the: activation energy is predicted to be 67 kJ/mol. Molecules from the solvent act as a catalyst in this step. However, at high acetate concentration, formation of a vacancy at a terminal acetate site is inhibited, which results in a negative reaction order with respect to acetate. Solvent effects are explicitly taken;into account in all steps as a correction to the energies obtained in a vacuum.