We have investigated the formation and reaction of phenyl fragments on Pd(1 1 1) and Pd(1 1 0), using synchrotron radiationbased photoelectron spectroscopy. The phenyl fragments are formed by carbon-iodine bond scission of iodobenzene, taking place already at 80 K. Pd(1 1 0) is seen to be more reactive than Pd(1 1 1) in this reaction. With annealing, the phenyl fragments subsequently form both benzene and biphenyl products. Ring coupling is found to be somewhat more efficient on Pd(1 1 1).