A detailed theoretical investigation of the mechanism for the [Ni-0]-catalyzed co-oligomerization of 1,3-butadiene and ethylene to afford linear and cyclic C-10-olefins is presented. Crucial elementary processes have been carefully explored for a tentative catalytic cycle, employing a gradient-corrected density functional theory (DFT) method, The favorable route for oxidative coupling starts from the prevalent [Ni-0-(eta(2)-butadiene)(2)(ethylene)] form of the active catalyst through oxidative coupling between the two eta(2)-butadienes. The initial eta(3),eta(1)(C-1)-octadienediyl-Ni-II product is the active precursor for ethylene insertion, which preferably takes place into the syn-eta(3)-allyl-Ni-II bond of the prevalent eta(3)-syn,eta(1)(C-1),Delta-cis isomer. The insertion is driven by a strong thermodynamic force, giving rise entirely to eta(3),eta(1), Delta-trans-decatrienyl-Ni" forms, with the eta(3)-anti,eta(1),Delta-trans isomer almost exclusively generated. Occurrence of allyl,eta(1),Delta-cis isomers, however, is precluded on both kinetic and thermodynamic grounds, thereby rationalizing the observation that cis-DT and cis,cis-CDD are never formed. Linear and cyclic C-10-olefins are generated in a highly stereoselective fashion, with trans-DT and cis,trans-CDD as the only isomers, along competing routes of stepwise transition-metal-assisted H-transfer (DT) and reductive CC elimination under ring closure (CDD), respectively, that start from the prevalent eta(3)-anti,eta(1),Delta-trans-decatrienyl-Ni" species. The role of allylic conversion in the octadienediyl-Ni-II and decatrienyl-Ni-II complexes has been analyzed. As a result of the detailed exploration of all important elementary steps, a theoretically verified, refined catalytic cycle is proposed and the regulation of the selectivity for formation of linear and cyclic C-10-olefins is elucidated.