The efficacy of crown ether as a promoter for intramolecular SN2 reactions is presented, along with the underlying mechanism. The crown ether unit is shown to tremendously accelerate the acetoxylation/cyanation of the crown ether substrate 1 using the metal salts KOAc/KCN. Quantum chemical calculations are presented to examine whether KCN/KOAc reacts as a contact ion‐pair (CIP) or as a solvent‐separated ion‐pair (SIP). By comparing the Gibbs free energies of the transition states we predict that the CIP mechanism would be much more favorable than the SIP pathways for SN2 acetoxylation, whereas both routes are comparable for cyanation. Relative stability of pre‐reaction complexes of the two alternative routes is also examined. The pre‐reaction complex for the CIP pathway is much more stable (G lower by >6.0 kcal/mol) than the SIP counterparts for acetoxylation, indicating that experimental observation of this complex might be a direct evidence of the CIP mechanism of SN2 processes.