A comparative investigation into palladium-catalyzed allylic amination of unsubstituted aziridines and secondary amines has been carried out. The use of NH aziridines as nucleophiles favors formation of valuable branched products in the case of aliphatic allyl acetates. The regioselectivity of this reaction is opposite to that observed when other amines are used as nucleophiles. Our study provides evidence for the palladium-catalyzed isomerization of the branched (kinetic) product formed with common secondary amines into the thermodynamic (linear) product. In contrast, the branched allyl products obtained from unsubstituted aziridines do not undergo the isomerization process. Crossover experiments indicate that the isomerization of branched allylamines is bimolecular and is catalyzed by Pd-0. The reaction has significant solvent effect, giving the highest branched-to-linear ratios in THF. This finding can be explained by invoking the intermediacy of sigma-complexes, which is consistent with NMR data. The apparent stability of branched allyl aziridines towards palladium-catalyzed isomerization is attributed to a combination of factors that stem from a higher degree of s-character of the aziridine nitrogen compared to other amines. The reaction allows for regio- and enantioselective incorporation of aziridine rings into appropriately functionalized building blocks. The resulting methodology addresses an important issue of forming quaternary carbon centers next to nitrogen. The new insights into the mechanism of palladium-catalyzed allylic amination obtained in this study should facilitate synthesis of complex heterocycles, design of new ligands to control branched-to-linear ratio, as well as absolute stereochemistry of allylamines.