Density functional methodology has been used to study the mechanistic details of the migratory insertion of CO into the transition metal-alkyl sigma bond of the Fe cyclopentadienyl complexes CpFe(CO)(2)CH3 and [CpFe(CO)(2)CH3](+) in the presence of phosphine, PH3. Geometries, energies, and vibrational frequencies of reactants, molecular complexes, transition states, intermediates, and products are determined. Methyl migration with little PH3 participation is the rate-determining step for both the neutral system and the cation system. Addition of PH3 stabilizes the metastable intermediates [CpFe(CO)(COCH3)- -PH3](0/+) and the products [CpFe(CO)(COCH3)(PH3)](0/+). The calculated activation energies of the rate-determining steps are 17.8 and 7.5 kcal/mol for the neutral and cation reaction, respectively. The significant difference in these barriers is not due to the oxidatively promoted reaction utilizing a significantly different mechanism, but is interpreted in terms of methyl migration in the cation as having more radical character induced by the unpaired electron on Fe. For the reverse of the neutral migratory-insertion reaction, the overall activation energy is 24.3 kcal/mel. Thus, as is observed, the neutral reaction will be reversible only at higher temperatures. The overall exothermicities are -4.6 and -29.4 kcal/mol for the neutral and the cation reaction, respectively. The eta(2)- acyl intermediates {CpFe(CO)(COCH3)}(0/+) are more stable by 6.1 and 11.1 kcal/mol than the eta(2)-methyl (agostic) intermediates, respectively. However, these eta(2)-acyl intermediates are not involved in the favored pathway of either reaction due to higher barriers for their formation. Natural bond orbital analyses for the molecular complexes [CpFe(CO)(2)(CH3)- -PH3](0/+) show a weak donor-acceptor interaction, where the phosphine behaves as acceptor in the neutral complex but as a donor in the cation.