Abstract Coincidence spectra of energetic electrons with threshold electrons were measured following photo-excitation of the Xe 4d3/2, 5/2 → np resonances, in order to investigate the origin of threshold electrons, and the mechanism leading to formation of the Xe2+ 5p−2 and 5s−15p−1 final states. A two-step decay process was observed in the production of Xe2+ 5p−2(1D) following decay of the 7p resonance, where the intermediate state is Xe+* 5p−2(1S)8p that autoionizes emitting a pseudo-threshold electron. This process was confirmed in a time-of-flight analysis of the coincidence spectra of the energetic electrons with the threshold photoelectrons. It is suggested that a similar two-step process also contributes to the population of excited Xe2+ states and is the main origin for the production of threshold electrons in decay of the 4d−1 np resonances.