We present a detailed DFT‐based mechanistic investigation of syngas conversion mechanism over Co4 cluster grafted onto HZSM‐5 zeolite, [Co4H], employing a QM/MM embedded cluster approach. Starting from the [Co4H] complex, our results show that a favorable coordination of CO over H2, followed by CO hydrogenation leads to a stable −CH2O complex, [Co4(CH2O)(H)]. Coordination of a second CO molecule to [Co4(CH2O)(H)] complex, followed by CH2−O bond activation, and subsequent removal of CO as CO2 results in the formation of crucial methylene complex [Co4(CH2)(H)], serving as a branching point for the pathways leading to methane, ethene, and ethane. On the pathway to ethene formation, coordination of a third CO molecule to [Co4(CH2)(H)] complex yields the active [Co4(CH2)(CO)(H)] complex, which is 16.0 kcal mol−1 more stable than the methyl complex [Co4(CH3)] on the pathway to methane. From the active species [Co4(CH2)(CO)(H)], we demonstrate that the pathways to both methane and ethene are competing in nature, with the −CH3 hydrogenation barrier, 35.1 kcal mol−1, is lower by only 1.3 kcal mol−1 than the competing C−O bond activation barrier on the pathway to ethene, 36.4 kcal mol−1. However, the significant stability of the active species [Co4(CH2)(CO)(H)] effectively compensates for this minor difference in barriers, ultimately favoring the formation of ethene over methane. Finally, the ethene desorption barrier is 4.1 kcal mol−1 lower than the ethene hydrogenation barrier on the pathway to ethane, indicating the ease of ethene removal from the system. Overall, our DFT study describes that the syngas conversion mechanism catalyzed by [Co4H] system produces ethene selectively via 4CO+2H2→C2H4+2CO2.