A computational study with the B3LYP density functional theory was carried out to study the reaction mechanism for the cycloisomerization of allenes catalyzed by Au(I) and Au(III) complexes. The catalytic performance of Au complexes in different oxidation states as well as the effects of the counterion on the catalytic activities has been studied in detail. Our calculations show that the catalytic reaction is initiated by coordination of the Au(I) or Au(III) catalyst to the distal double bond of allene and activation of allene toward facile nucleophilic attack, then 3-pyrroline obtained via two-step proton shift, followed by demetalation. On the basis of our calculations, H shifts are key steps of the catalytic cycle, which are significantly affected by the gold oxidation state, counterion, ligands, and assistant catalyst. AuCl is found to be more reactive than AuCl3; however, the Au(III)-catalyzed path does not involve an oxidation state change from Au(III) to Au(I). Our calculated results rationalize the experimental findings well and overthrow the previous conjecture about Au(I) serving as the catalytically active species for Au(III)-catalyzed cycloisomerization.