Poly(phenylacetylene) (PPA) has versatile electrical and optical properties due to its intriguing pi-conjugated backbone, configuration, stereoregularity, and helical conformation. Detailed DFT, ONIOM, and ONIOM-MD studies are presented to understand the mechanisms of Rh-catalyzed polymerization of phenylacetylene and the factors that control its regioselectivity and stereochemistry. The polymerization proceeds via the Rh(I) insertion mechanism (Delta H(double dagger) approximate to 9 kcal/mol), although all the Rh(I), Rh(III), and Rh-carbene types of active species are thermodynamically and kinetically plausible in solution; the Rh(III) insertion and the Rh-carbene metathesis mechanisms both have higher activation enthalpies (similar to 22 and similar to 25 kcal/mol, respectively). Phenylacetylene prefers a 2,1-inserion, leading to head-to-tail regioselective PPA via a unique pi-conjugative transition state. This pi-conjugative characteristic specifically favors the 2,1-insertion due to the steric repulsion. Kinetic factors play a key role in the stereoregularity. The polymerization adopting a cis-transoidal conformation is the most favorable. The kinetic difference for the insertion originates in the conformational constraints of the parent propagation chain in the transition state. These fundamental guidelines should help advance the development of efficient and structurally tailorable PPA catalysts.