We report the first catalytic methods for the transformation of C–H bonds of unactivated arenes into C–Al bonds. The catalytic reactions occur at 25 °C (benzene, toluene and xylenes) with palladium loadings as low as 0.1 mol%. Remarkably, the C–H activation of toluene and xylenes proceeds with ortho- and meta-selectivity. This selectivity is highly unusual and complementary to both Friedel–Crafts and the majority of C–H borylation methods. Through a detailed mechanistic analysis (Eyring analysis, KIE, DFT, QTAIM) we show that unusual Pd–Al intermetallic complexes are on the catalytic cycle and that the selectivity is determined by weak attractive dispersion forces in the transition state for C–H bond breaking.