Density functional theory calculations were used to systematically explore the effects of axial ligation by solvent molecules on the reactivity and selectivity of dirhodium tetracarboxylates with diazo compounds in the context of C-H insertion into propane.Insertions on three types of diazo compounds-acceptor/acceptor, donor/acceptor, and donor/donor-promoted by dirhodium tetraformate were tested with and without axial solvent ligation for no surrounding solvent, dichloromethane, isopropanol, and acetonitrile. Magnitudes, origins, and consequences of structural and electronic changes arising from axial ligation were characterized. The results suggest that axial ligation affects barriers for N2 extrusion and C-H insertion, the former to a larger extent.