By carrying out density functional theoretical calculations, we have performed a detailed mechanistic study of the Au(I)-catalyzed cycloisomerization of 1,6-enylnyl ester in a dry and wet dichloromethane solvent corresponding to hydrogenation and hydrolysis processes, respectively. The hydrogenation and hydrolysis mechanisms proposed in the previous literature starting from an enol ketal intermediate without the involvement of an Au(I) catalyst are found to involve high barriers and thus contradict the observed experimental findings. Alternatively, based on the theoretical calculations, a novel hydrogenation mechanism (i.e., Au-induced H-shift followed by enol intermediate self-promoted H-shift) and a hydrolysis mechanism (i.e., Au-stabilized H-shift/C-O binding with subsequent H2O-assisted H-shift) from an Au-enol ketal adduct corroborate the experimental observations. The calculated results indicate that under unchanged wet conditions, the formation of a hydrolysis product is not involved in the intermediacy of the hydrogenation product. However, if the initial dry environment is provided, a hydrogenation product will be afforded. And then it will relentlessly evolve into a hydrolysis product in the subsequent wet conditions. The present theoretical results not only rationalize the experimental observations well but provide new insight into the mechanisms of the significant water-mediated cycloisomerization reaction.