The reduction of water to H2 by the tris(pyrazol-1-yl)borate complex [Pd(CH2CH2CH2-CH2){(pz) 3BH-N,N′}]- with concomitant formation of the palladium(IV) complex Pd(CH2-CH2CH2CH2)(OH){(pz) 3BH-N,N′,N″} has been studied theoretically at the MP2//SCF level using [PdMe2{(H2C=N-NH)3BH)]- as a model for the pallada(II)cyclopentane reagent. The calculations suggest that the uncoordinated pyrazole group has a major role as an intramolecular nucleophile in delivering 2H+ (per mole of H2 formed) to the palladium center, with an eventual role as a coordinated group in the palladium(IV) product. Thus, initial protonation leads to formation of a N-protonated palladium(II) species Pd(CH2CH2CH2CH2)-{(pz) 2(pzH)BH-N,N′} containing a "Pd⋯H-N" interaction, followed by hydroxide coordination and hydrido ligand formation to give a palladium(IV) species trans-[Pd(CH2CH2CH2-CH 2)(H)(OH){(Pz)3BH-N,N′)]-, a second protonation to form trans-Pd(CH2CH2CH2CH 2)-(H)(OH){(pz)2(pzH)BH-N,N′ prepared for a dihydrogen bond interaction "Pd-H⋯H-N", and finally by elimination of H2 and coordination of the pyrazole group to form Pd(CH2CH2-CH2CH2)(OH){(Pz) 3BH-N,N′,N″}.