Density functional M11 was used to study the mechanism and enantioselectivity of a binaphthophosphepine-catalyzed intramolecular [3 + 2] cycloaddition reaction. The computational results revealed that this reaction proceeds through nucleophilic addition of the phosphine catalyst to the allene, which yields a zwitterionic phosphonium intermediate. The subsequent stepwise [3 + 2] annulation process, which starts with the intramolecular nucleophilic addition of the allenoate moiety to the electron-deficient olefin group, determines the enantioselectivity of the reaction. This step is followed by a ring-closing reaction and water-assisted proton-transfer process to afford the final product with concomitant regeneration of the phosphine catalyst. Theoretical predictions of the enantioselectivity for various phosphine catalysts were consistent with experimental observations, and 2D contour maps played an important role in explaining the origin of the enantioselectivity. Moreover, on the basis of our theoretical study, new binaphthophosphepine catalysts were designed and that are expecting to afford higher enantioselectivity in this cycloaddition reaction.