Iodine catalysed the transfer hydrogenation of a benzylic C–C σ-bond in [2.2]paracyclophane with water to yield 4,4′-dimethylbibenzyl. The C–C σ-bond was first cleaved by homolytic substitution with iodine radicals to produce a 4,4′-diiodomethylbibenzyl intermediate. The benzylic C–I bonds in this intermediate were subsequently reduced by HI, generated in situ from the disproportionation of I₂ with H₂O, to achieve transfer hydrogenation and regenerate I₂.