(Ph3P)2PdCl2 was found to be the most effective of a range of catalysts for decarboxylative carbonylation of (4S,5RS)-5-ethenyl-4-(2-propyl)oxazolidin-2-one to give the δ-lactam, (6S)-3,6-dihydro-6-(2-propyl)-1H-pyridin-2-one. In a similar way, diastereoisomerically pure (4S,5S)-4-benzyl-5-((Z)alk-1-enyl)oxazolidin-2-ones undergo stereospecific carbonylation to give (3R,6S)-6-benzyl-3-alkyl-3,6-dihydro-1H-pyridin-2-ones. The diastereoisomeric (4S,5R)-4-benzyl-5-((Z)alk-1-enyl)oxazolidin-2-ones give rise to a separable mixture of the corresponding (3S,6S)-6-benzyl-3-alkyl-3,6-dihydro-1H-pyridin-2-one and (4S,5S)-4-benzyl-5-((E)alk-1-enyl)oxazolidin-2-one. Under more forcing conditions, the latter oxazolidinone is carbonylated to the 3,6-anti-pyridinone. The stereochemical course of the reactions can be rationalized by formation of a π-allyl palladium cation with inversion of configuration followed by carbonylation with retention. The stereospecificity observed in our system precludes metal-metal exchange of the π-allyl complexes by a Pd(0) displacement process. © 2002 Elsevier Science Ltd. All rights reserved.