A DFT method was used to enlighten the reaction mechanism between dimethylacetylendicarboxylate (DMAD) and acetylacetone (ACAC) in the presence of triphenylarsine (TPA) as an efficient catalyst. Different paths of mechanism and transition states with possible intermediates were proposed and evaluated thermodynamically and kinetically. The results showed that the reaction starts with a nucleophilic attack by the TPA on the DMAD, and then it was followed by other four steps. For all of the intermediates, Z conformer was more favorable than E conformer, and also the trans configuration of the product was more favorable than of cis configuration. Enol form of ACAC was more preferred than keto form in step 4 , but keto form was favorable for the other steps. For this reason, the reaction mechanism couldn't proceed through the enol-form, and the mechanism regarding keto-form of ACAC was the right mechanism. There were two possibilities for the proton-transferring step 4 which lead to different products. Trans di (methoxycarbonyl)-3,3-diacetylcyclopropane product 3, which was the result of 1, 3 non-linear proton-transfer arrangement and (Z)-Alkene dimethyl 2-(pentane-2,4-dione) fumarate (product 4) which was produced by 1, 2 non-linear proton-transferring arrangement. Thermodynamic parameters exhibited that Z-Alkene is more stable than cyclopropane product, but cyclopropane product was more preferred kinetically (E a trans cyclopropane = 44.75 kcal mol −1 , E a Alkene = 66.75 kcal mol −1).