Density functional theory calculations have been performed to probe the reaction mechanism of the recently reported twofold C−H annulation of arylformamides with alkynes by Ni−Al bimetallic catalysis. The main pathway consisted of the formyl C−H activation, phenyl C−H activation, migratory insertion, and reductive elimination steps in succession. The desired annulation product was found to be the equilibrium‐controlled product, while the minor hydrocarbamoylation product was the kinetics‐controlled product. Calculated free‐energy profiles indicated that the annulation and hydrocarbamoylation pathways could intersect with each other and merge into a mechanism unity, in which the reaction system entered the hydrocarbamoylation pathway in early stage and switched to the annulation pathway afterwards via suitable transition states. The modified mechanism picture demonstrated the phenyl C−H activation step to be the rate‐determining step with a free‐energy barrier of 27.7 kcal/mol. However, this barrier was only 19.4 kcal/mol on the basis of a single annulation pathway, which could not satisfactorily agree with the experimental conditions and kinetic isotope effects. In addition, the crucial role of the bifunctional secondary phosphine oxide ligand in promoting the reactivity and selectivity was elucidated in detail.