Density functional theory was employed to investigate rhodium(I)-catalyzed C-C bond activation of siloxyvinylcyclopropanes and diazoesters. The B3LYP/6-31G(d,p) level (LANL2DZ(f) for Rh) was used to optimize completely all intermediates and transition states. The computational results revealed that the most favorable pathway was the channel forming the methyl-branched acyclic product p1 in path A (cyclooctadiene (cod) as the ligand), and the oxidative addition was the rate-determining step for this channel. It proceeded mainly through the complexation of diazoester to rhodium, rhodium-carbene formation, coordination of siloxyvinylcyclopropane, oxidative addition (C2-C3 bond cleavage) of siloxyvinylcyclopropane, carbene migratory insertion, β-hydrogen elimination and reductive elimination. The complexation of diazoester to rhodium occurred prior to the coordination of siloxyvinylcyclopropane. Also, the role of the ligands cod, chlorine and 1,4-dioxane, the effect of di-rhodium catalyst and the solvent effect are discussed in detail.