Cyclic ketones react with PdCl2 in methanol under a CO atmosphere to give mainly diesters by a ring cleavage reaction along with some chloro-substituted monoester. 13CO labeling experiments indicate the major product is formed by a mechanism involving Pd(II)-CO2CH3 insertion across the double bond of the enol form of the ketone. Pd(II) elimination and acid-catalyzed ring cleavage form a second methyl ester group.