The mechanism of ethylene with vinyl ether (VE, CH2=CHOEt) copolymerization catalyzed by phosphine-sulfonate palladium complex (A) was investigated by density functional theory (DFT) calculation. On achieving an agreement between theory and experiment, it is found that the favorable 1,2-selective insertion of VE into the complex A originates from stronger hydrogen interaction between the oxygen atom of VE and the ancillary ligand of catalyst A. Additionally, VE insertion is easier into the ethylene pre-inserted intermediate than that into the catalyst to form the resultant copolymers with the major units of OEt in chain and minor units of OEt at the chain end. The effect of β-OEt and β-H elimination was explored to elucidate chain termination and the molecular weight of copolymers. Furthermore, a family of cationic catalysts has been demonstrated to copolymerize ethylene with VE along with our modified cationic complex B with higher incorporation of VE and reactivity in comparison with complex A, which was modelled computationally by increasing the strong interactions between the catalyst and monomer moiety. Other than VE, the activity of cationic complex B for copolymerization of vinyl chloride and methacrylate is also computed successfully.