To achieve more insight into palladium-catalyzed H-H, C-H, C-C, and C-Cl bond activation and the mutual competition between these processes, several mechanistic pathways for oxidative addition of Pd(0) to H-2 (H-H), CH4 (C-H), C2H6 (C-C and C-H), and CH3Cl (C-Cl) were studied uniformly at the ZORA-BP86/TZ(2)P level of relativistic nonlocal density functional theory (DFT). Oxidative addition is overall exothermic for all model reactions studied, with 298 K reaction enthalpies (DeltaH(r,298)) of -35.7 kcal/mol (C-Cl) through -9.7 kcal/mol (C-H in CH4). The lowest barrier pathway is the direct oxidative insertion of Pd into the C-X or H-H bond (X = H, CH3, Cl), with 298 K activation enthalpies (DeltaH(298)(double dagger)) that increase in the order H-H (-21.7 kcal/mol) < C-Cl (-6.0 kcal/mol) approximate to C-H (-5.0 and -4.1 kcal/mol for CH4 and C2H6) < C-C (9.6 kcal/mol). The "straight" S(N)2 substitution resulting in PdCH3+ + X-or PdH+ + H- is highly endothermic (144-237 kcal/mol) and thus not competitive. Only in the case of Pd + CH3Cl is a third pathway found in which S(N)2 substitution occurs in concert with a rearrangement of the Cl- leaving group from C to Pd (S(N)2/Cl-ra) leading, in one step, to CH3PdCl via an activation barrier DeltaH(double dagger)298 of 21.2 kcal/mol. The competition between the various bond activation processes is analyzed using the activation strain model in which activation energies (DeltaE(double dagger)) are decomposed into the activation strain (DeltaE(strain)(double dagger)) of and the stabilizing transition state (TS) interaction (DeltaE(int)(double dagger)) between the reactants in the activated complex: DeltaE(double dagger) = DeltaE(strain)(double dagger) + DeltaE(int)(double dagger). Interestingly, the activation strain DeltaE(strain)(double dagger) adopts characteristic values for each type of bond and reaction mechanism. The trend in TS interaction DeltaE(int)(double dagger) turns out to be mainly determined by the donor-acceptor orbital interactions between occupied Pd 4d atomic orbitals and the empty sigma*(C-X) (or sigma*(H-H)) acceptor orbital associated with the bond to be activated in the substrate.