The palladium-catalyzed reaction of simple arenes and nitriles provides good to excellent yields of aryl ketones or the corresponding hindered imines. The addition of a small amount of DMSO increases the yields dramatically. Both intermolecular and intramolecular examples of this process are successful. This novel chemistry is believed to involve palladium-catalyzed C−H activation, followed by carbopalladation of the nitrile.