Unusual reactions are reported, in which the aromatic PNP ligand (PNP = 2,6-bis-(di-tert-butylphosphinomethyl)pyridine) acts in concert with the metal in the activation of H2 and benzene, via facile aromatization/dearomatization processes of the ligand. A new, dearomatized electron-rich (PNP*)Ir(I) complex 2 (PNP* = deprotonated PNP) activates benzene to form the aromatic (PNP)Ir(I)Ph 4, which upon treatment with CO undergoes a surprising oxidation process to form (PNP*)Ir(III)(H)CO 6, involving proton migration from the ligand "arm" to the metal, with concomitant dearomatization. 4 undergoes stereoselective activation of H2 to exclusively form the trans-dihydride 7, rather than the expected cis-dihydride complex. Our evidence, including D-labeling, suggests the possibility that the Ir(I)-Ph complex is transformed to the dearomatized Ir(III)(Ph)(H) (independently prepared at low temperature), which may be the actual intermediate undergoing H2 activation.