DFT calculations have been applied to investigate the reaction mechanism of rhodium dimer, [Rh(CO)2Cl]2, catalyzed intermolecular (5 + 2) reactions between vinylcyclopropanes and alkynes. The catalytic species is Rh(CO)Cl and the catalytic cycle is through the sequential reactions of cyclopropyl cleavage of vinylcyclopropane, alkyne insertion (rate-determining step), and a migratory reductive elimination.