The reaction mechanism between phosphacyclopropenylidene and methyleneimine has been systematically investigated at the M06–2X/6–311++G(d,p) level of theory in order to better understand the reactivity of unsaturated cyclic phosphorus-bearing carbene. Geometry optimizations and vibrational analyses have been conducted for the stationary points on the potential energy surface of the system. Calculations show that the spiro bicyclic intermediate could be produced through the cycloaddition process between phosphacyclopropenylidene and methyleneimine initially. The reaction mechanism is illustrated with frontier molecular orbital theory. Introduction of electron-withdrawing group in phosphacyclopropenylidene will better facilitate the addition process. Through subsequent ring-expanding and hydrogen-migrating process, fuse-ring and allene compounds could be produced, respectively. Furthermore, it’s easy for spiro bicyclic intermediate and another methyleneimine to form a spiro tricyclic compound. This study is helpful to understand the reactivity of phosphacyclopropenylidene, the evolution of phosphorus-bearing molecules in space, and to offer an alternative approach to the formation of phosphorus-bearing heterocyclic compound.