Inspired by recent reports of low-valent iron-complex-catalyzed formal [2+2] cycloaddition of olefins, we demonstrate computationally that with such low-valent iron complexes and with "strong" ligands, the olefin metathesis is also preferred over the undesired cyclopropanation side-reaction, competition already studied by Hoffmann and co-workers almost 40 years ago (J. Am. Chem. Soc. 1981, 103, 5582). The [2+2] cycloaddition step in metathesis propagation, which gives a Chauvin-type metallacyclobutane intermediate, is proposed to proceed either via a planar four-electron Craig-Möbius aromatic [π2 +π2 ] transition-state structure with a low barrier of 4.7 kcal mol or, alternatively, via a twisted Zimmerman-Möbius aromatic [π2 +π2 ] transition state with a 5.5 kcal mol activation-energy barrier, with respect to an "encounter" π-complex minimum obtained from an Fe alkylidene and the entering olefin, while the corresponding triplet pathways are all disfavored.