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Isolable sulfonium-ylide stabilized palladium carbene complexes were synthesized through palladium(II)-induced cyclization of 1,2-alkynylarylsulfanes. X-ray crystallographic analysis characterized the maintenance of a palladium +2 oxidation state, with carbene-carbon–palladium bond lengths of 1.95 Å, indicating partial double bond character. These endocyclic sulfonium ylide carbenes represent the first characterized and/or isolable examples of this ligand class; such groups were previously proposed as reaction intermediates during cyclization–carbonylation reactions. A variety of palladium(II) complexes bearing sulfonium ylide carbene ligands, with differing substituents, were synthesized and the structure and stability of these complexes in solution were analyzed by 1H and 13C NMR spectroscopy, revealing reversibility and a stability dependence on substituents. The chirality of the sulfur heteroatom and the overall properties these ligands provide a potential electronic and steric alternative to existing carbene ligands, which could facilitate the future development of complementary metal-based reactivity.