The Rh(III)-catalyzed C-H functionalizations of benzamide derivatives with olefin were studied by DFT calculations to elucidate the divergent pathways controlled by the N-OR internal oxidants. For substrates of N-OMe and N-OPiv internal oxidants, the energy profiles for consecutive N-H deprotonation/C-H activation/olefin insertion sequences were similar, and different properties and reactivities of the generated 7-membered rhodacycles were predicted. When N-OMe is involved, this intermediate is generally unstable, and the olefination occurs easily via a β-H elimination/reductive elimination (RE) sequence to generate the Rh(I) intermediate, which is then oxidized to the active Rh(III) via MeOH elimination from the N-OMe reduction in the presence of a HOAc. However, for a 7-membered rhodacycle containing a N-OPiv moiety, the coordination of the acyloxy carbonyl oxygen stabilizes this intermediate and increases the barrier of the olefination pathway. Instead, the migration of the acyloxy from N to Rh(III) via a 5-membered ring TS to form a cyclic Rh(V) nitrene intermediate is more kinetically favorable, then the facile RE of this Rh(V) species forms the heterocycle product and regenerates Rh(III). Notably, for both reactions, the direct C-N formation from intermediates containing a C(sp(3))-Rh(III)-N(sp(3)) unit would be very difficult with barriers over 40 kcal/mol.