A theoretical study of the oxidative addition of C-C vs C-H bonds to a rhodium(I) complex with PCP-type ligands has been carried out. Special attention has been paid to the effect of different bulky substituents at the phosphorus atoms of the chelate ligand. Therefore, B3LYP/lanl2dz+p:B3LYP/lanl2dz and ONIOM(B3LYP/lanl2dz+p:B3LYP/lanl2dz)//ONIOM(B3LYP/lanl2dz:HF/la nl1mb) methods have been utilized. According to the calculations, C-H activation is always the kinetically favored process (Delta Delta E-double dagger 20 kJ . mol(-1)), though the C-C activation product is more stable (Delta Delta E 20 KJ . mol(-1)). C-H addition is a reversible process; the product of the C-H activation can interconvert to the C-C activation product via an intermediate structure. Bulky substituents are found to increase the barrier for C-H activation relative to that for C-C activation. With additional ligands (e.g., phosphines), hexacoordinate complexes are formed. This is more favorable for the C-C activation products. Our calculations show that the activation reaction proceeds via complexes with a pentacoordinated rhodium atom. Thus, in the presence of donor ligands, the activation reaction is inhibited.