The mechanism of the redox-neutral organocatalytic Mitsunobu reaction, catalyzed by (2-hydroxybenzyl)diphenylphosphine oxide, reported by Denton et al., has been studied computationally with ωB97X-D density functional theory. We discovered that the nucleophilic substitution reaction between carboxylate and alkoxyphosphonium ions, to reform the phosphine oxide catalyst, is the rate-determining step of the overall process and is significantly accelerated compared with a general-acid-catalyzed SN2 reaction. The (2-hydroxybenzyl)diphenylphosphine oxide is regenerated and activated in every catalytic cycle via intramolecular dehydration/cyclization. We also designed several phosphine oxide catalysts that we predict to be more effective catalysts.