The nucleophilic substitution mechanism of enantioselective allylation of α-chloro glycinate catalyzed by squaramide organocatalysts was studied using density functional theory. Based on a comprehensive study of S N 1 and S N 2 pathways of a catalyst-free reaction, we found that the catalytic reaction slightly favors the S N 1 mechanism, instead of the previously proposed S N 2 mechanism. Further investigation of different leaving groups and nucleophiles revealed that this is not limited to the present reaction, and the S N 1 mechanism might have been generally overlooked. For the squaramide-catalyzed reactions, the S N 1 mechanism was predicted to be preferred. However, the rate-determining step of the S N 1 pathway has changed from the chloride-leaving step to the C−C bond-formation step. Therefore, a first-order dependence on both substrates was predicted, in agreement with the observed second-order kinetics. Intriguingly, the lowestenergy enantioselective transition states (TSs) originate from different pathways; R-inducing TS corresponds to the S N 1 pathway, while S-inducing TS corresponds to S N 2. The calculated enantiomeric excesses of two squaramide catalysts agree well with the experimental values. Given the ubiquity of nucleophilic substitution reactions in chemistry and biology, we believe that our finding will inspire more studies that will lead to an improved mechanistic understanding of important chemical reactions, and it may even lead to better catalysts.