Palladium-catalyzed activation of remote meta-C-H bonds in arenes containing tethered alcohols was achieved with high regioselectivity by using a nitrile template. Computational studies on the macrocyclic transition state of the regioselectivity-determining C-H activation steps revealed that both the C-N-Ag angles and gauche comformations of phenyl ether play an extremely important role in the meta selectivity.