Density functional theory (DFT) is used to explore competitive C-H and C-Cl oxidative additions (OA) of chlorobenzene by the neutral Rh(I) complex: (PNP)Rh-1 [PNP = bis(Z-2-(dimethylphosphino)vinyl)amino]. Consistent with experimental results, our calculation shows that C-Cl OA (Delta G(double dagger) = 16.0 kcal.mol(-1)) is kinetically competitive with C-H OA (Delta G(double dagger) = 16.7 kcal.mol(-1)) and that the C-Cl OA is thermodynamically preferred by 28.3 kcal.mol(-1) over the most stable C-H OA product. Hence, the only experimentally observed product was from C-Cl OA.