The mechanism of the copper(I)-catalyzed cyclopropanation reaction has been extensively investigated for a medium-size reaction model by means of B3LYP/6-31G(d) calculations. The starting ethylene complex of the N,N'-dimethylmalonaldiimine--copper (I) catalyst undergoes a ligand exchange with methyl diazoacetate to yield a reaction intermediate, which subsequently undergoes nitrogen extrusion to generate a copper--carbene complex. The cyclopropanation step takes place through a direct carbene insertion of the metal--carbene species to yield a catalyst--product complex, which can finally regenerate the starting complex. The stereochemical predictions of a more realistic model (by considering a chiral bis(oxazoline)--copper (I) catalyst) have been rationalized in terms of steric repulsions, showing good agreement with experimental data.