The phosphorus ylide ligand [Ph3P=C(CO2Me)C(=NPh)CO2Me] (L1) has been prepared and fully characterized by spectroscopic, crystallographic, and density functional theory (DFT) methods (B3LYP level). The reactivity of L1 toward several cationic Pd(II) and Pt(II) precursors, with two vacant coordination sites, has been studied. The reaction of [M(C/\X)(THF)2]ClO4 with L1 (1:1 molar ratio) gives [M(C/\X)(L1)]ClO4 [M = Pd, C/\X = C6H4CH2NMe2 (1), S-C6H4C(H)MeNMe2 (2), CH2-8-C9H6N (3), C6H4-2-NC5H4 (4), o-CH2C6H4P(o-tol)2 (6), eta3-C3H5 (7); M = Pt, C/\X = o-CH2C6H4P(o-tol)2 (5); M(C/\X) = Pd(C6F5)(SC4H8) (8), PdCl2 (9)]. In complexes 1-9, the ligand L1 bonds systematically to the metal center through the iminic N and the carbonyl O of the stabilizing CO2Me group, as is evident from the NMR data and from the X-ray structure of 3. Ligand L1 can also be orthopalladated by reaction with Pd(OAc)2 and LiCl, giving the dinuclear derivative [Pd(mu-Cl)(C6H4-2-PPh2=C(CO2Me)C(CO2Me)=NPh)]2 (10). The X-ray crystal structure of 10 is also reported. In none of the prepared complexes 1-10 was the C(alpha) atom found to be bonded to the metal center. DFT calculations and Bader analysis were performed on ylide L1 and complex 9 and its congeners in order to assess the preference of the six-membered N,O metallacycle over the four-membered C,N and five-membered C,O rings. The presence of two stabilizing groups at the ylidic C causes a reduction of its bonding capabilities. The increasing strength of the Pd-C, Pd-O, and Pd-N bonds along with other subtle effects are responsible for the relative stabilities of the different bonding modes.