The mechanism of the intramolecular Pt(II)-catalyzed Rautenstrauch cyclopropanation and the stereochemical implications have been investigated by computational methods. The reaction takes place through a cyclopropanation step preceding the cleavage of the C-O bond, thus ensuring the transfer of chiral information from the stereogenic propargylic center. Our results agree with experimental findings and account for the origin of the substrate-dependent selectivity on the basis of subtle electronic effects and steric interactions in the cyclopropanation transition-state structure.