Sonolysis of aqueous solution of chlorobenzene at 200 kHz frequency in the presence of transition metals chlorides was investigated. Through analyzing the nature and distribution of the products detected in the reaction mixture, a new mechanism of sonodegradation is advanced. Depending on the metals used and their behavior during sonolysis, we were able to discriminate between inside and outside cavitation bubble mechanisms. Iron and cobalt chlorides, which could undergo redox reactions in the presence of HO radicals generated ultrasonically, give higher amounts of phenolic compounds compared with palladium chloride that undergoes a reduction to metal. Palladium reduction takes place in bulk solution and therefore all organic reactions that compete for hydrogen must occur also in bulk solution. Accordingly, palladium can be a useful tool in determining the reaction site and the decomposition mechanism of organic compounds under ultrasonic irradiation.