Density functional theory was used to investigate the oxidative addition and subsequent carbonyl insertion and deinsertion steps of the reaction of methyl iodide to a rhodium(I) acetylacetonato complex of the formula [Rh(acac)(CO)(PPh(3))] (Hacac = acetylacetone). This process has been studied experimentally for many rhodium β-diketonato complexes, but, to the best of our knowledge, this is the first systematic computational study of the complete reaction sequence. Experimental (1)H techniques complement the theoretical results on the stereochemistry of the reaction intermediates and products. (1)H NMR also revealed the existence of a second rhodium(III)-acyl product, which has not been previously observed in this reaction. The calculated Gibbs free energy of activation of the oxidative addition reaction is 71 kJ mol(-1), which is in agreement with the experimental value of 82(1) kJ mol(-1). The DFT-calculated oxidative addition corresponds to an associative S(N)2 nucleophilic attack by the rhodium metal centre on the methyl iodide, which is in agreement with calculated and experimental (in brackets) activation parameters of the reaction, 27 (38.8) kJ mol(-1) for ΔH((≠)) and -147 (-146) J K(-1) mol(-1) for ΔS((≠)).