Palladium-catalyzed transformation of cyclobutanone O-benzoyloximes to a variety of nitriles is described. The reaction may proceed via two important steps, that is, (i) oxidative addition of the N-O bond of oximes to Pd(0) to give a cyclobutylideneaminopalladium(II) species and (ii) beta-carbon elimination of this species to afford a reactive alkylpalladium species. The kind of products is very dependent on the nature of substituents on the cyclobutane ring. The direction of the C-C bond cleavage is controlled by the kind of ligand employed. The sequential reaction composed of the C-C bond cleavage and the subsequent intra- and intermolecular C-C bond formations via the corresponding alkylpalladium species is also demonstrated. For example, an oxime having an alkynyl moiety at a suitable position reacts with a variety of alkenes to afford nitriles bearing dienylcyclopentane moiety in moderate to good yields.