Employing small molecules or chemical reagents to modulate the function of an intracellular protein, particularly in a gain-of-function fashion, remains a challenge. In contrast to inhibitor-based loss-of-function approaches, methods based on a gain of function enable specific signalling pathways to be activated inside a cell. Here we report a chemical rescue strategy that uses a palladium-mediated deprotection reaction to activate a protein within living cells. We identify biocompatible and efficient palladium catalysts that cleave the propargyl carbamate group of a protected lysine analogue to generate a free lysine. The lysine analogue can be genetically and site-specifically incorporated into a protein, which enables control over the reaction site. This deprotection strategy is shown to work with a range of different cell lines and proteins. We further applied this biocompatible protection group/catalyst pair for caging and subsequent release of a crucial lysine residue in a bacterial Type III effector protein within host cells, which reveals details of its virulence mechanism.