The reactions of nitro complexes of nickel and palladium with CO have been examined to determine the mechanism(s) by which CO₂ is produced. The solution and solid state structures of square planar Ni(NO₂)₂(L)₂ reactants and pseudotetrahedral Ni(NO₂)(NO)(L)₂ products have been determined and related to their reactivity. Infrared, ³¹P{¹H}, and crystallographic data indicate rapid isomerization between nitro and nitrito bonding modes of the NO⁻₂ ligands. The crystal structures of Ni(NO₂)₂(PPh₂(Ch₂)₂PPh₂) (I), Ni(NO₂) (NO) (PMe₃)₂ (II), and [Ni(ONO) (NO) (PPh₂(CH₂)₂PPh₂]₂ (III), show the NO⁻₂ groups to be N-bonded in I and II and O-bonded in III. The nitrosyl ligands in II and III are non-linear (Ni-N-O = 165.5(8) ° and 153.4(8) °, respectively). Furthermore, III crystallizes as a dimer bridged by two phosphine ligands even though molecular weights show this complex to be monomeric in solution. Each Ni(NO₂) (NO) (L)₂ complex reacts with CO to produce stoichiometric amounts of Ni(NO₂) (NO) (L)₂ and CO₂. Rate date indicate the reaction proceeds associatively through formation of a carbonyl intermediate which has been directly observed in the reaction of Ni(NO₂)₂(P(C₆H₁₁)₃)₂ with CO. The reaction of C¹⁸O with Ni(NO₂)₂(PMe₃)₂ results in no incorporation of ¹⁸O into the nickel product while ¹⁸O is incorporated into CO₂ to form ¹⁸OC¹⁶O. The mechanism consistent with all of the data involves a rapid equilibrium between both forms of NO⁻₂ coordination followed by the reaction of CO with either isomer in the rate determining step to form a monocarbonyl complex. Irreversible oxygen atom transfer to CO and loss of CO₂ terminate the reaction. The corresponding square planar palladium complexes, Pd(NO₂)₂L₂, react with CO to form N₂O, CO₂ and novel tetranuclear palladium clusters (Pd₄(CO)₅L₄). A crystal structure of Pd₄(CO)₅ - (PMePh₂)₄ shows the cluster to be a distorted tetrahedron of metal atoms with one open edge and the five remaining edges each bridged by a carbonyl group.