The mechanism of the cross-coupling of phenylboronic acid with acetic anhydride, a viable model of the widely used Suzuki reaction, has been studied by DFT calculations at the BP86/6-31G* level of theory. Two alternative catalytic cycles have been investigated, one starting from a neutral Pd(0)L-2 complex, the other from an anionic "Jutand-type" [Pd(0)L2X](-) species. The reaction profiles are in good agreement with the experimental findings, as both pathways require only moderate activation energies. Both pathways are dominated by cis-configured square-planar palladium(II)diphosphine intermediates. Despite careful investigations, we did not find in this model reaction any evidence for five-coordinate palladium(II) intermediates, which are commonly believed to cause the profound effects of counterions in palladium-catalyzed transformations. Instead, our calculations suggest that the higher catalytic activity of anionic complexes, such as [Pd(PMe3)(2)OAc](-), may arise from their stronger ability to coordinate to carbon electrophiles. The transmetalation sequence is the same for both catalytic cycles, involving the dissociation of one phosphine ligand from the palladium. In the decisive transition state, in which the phenyl group is transferred from boron to palladium, the acetate base is found to be in a bridging coordination between these two atoms.