We investigate the pressure-driven structural and electronic evolution of ${\mathrm{PdSe}}_2$ using powder x-ray diffraction, Raman spectroscopy, and first-principles calculations. Beyond 2.3 GPa, suppression of the Jahn-Teller distortion induces in-plane lattice expansion and metallization. Around 4.8 GPa, the interlayer $d_{z^2}-{\pi }^{*}$ orbital hybridization drives the dimensional crossover, facilitating the transformation from the two-dimensional distorted to a three-dimensional undistorted pyrite phase. At $\sim 9\mathrm{GPa}$, a novel phase emerges, characterized by octahedral distortions in the $d$ orbitals of Pd. Structural analysis suggests the presence of marcasite ($Pnnm$) or arsenopyrite ($P{2}_1/c$) phase with orthorhombic and monoclinic configurations, respectively. Furthermore, the observed phonon anomaly and electronic structure modifications, including the emergence of flat bands in the high-pressure phases, elucidate the fundamental mechanisms underlying the previously reported exotic superconductivity with an enhanced critical temperature. These results highlight the pivotal role of dimensional crossover and structural transitions in tuning the electronic properties of puckered materials, providing pathways for novel functionalities.

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• Structural phase transition
• Layered crystals
• Density functional theory
• Pressure techniques
• Raman spectroscopy
• X-ray diffraction