Density functional theory is used to explore the mechanism of the copper(I)-chloride-catalyzed decomposition of W(CO)(5)-complexed 7-phosphanorbornadiene and the subsequent olefin trapping of the terminal phosphinidene complex. CuCl lowers the activation barrier by interacting directly with the breaking P-C bond. Contrary to the prevailing notion that a free terminal phosphinidene complex (W(CO)(5)=PR) is generated in the CuCl-catalyzed cheletropic elimination of the 7-phosphanorbornadiene-W(CO)(5) complex, the present mechanism suggests that CuCl is attached to the terminal phosphinidene. Furthermore, a "chloride shuttle" takes place where the chloride first migrates to the phosphorus center and then is returned back to the copper center by the incoming olefin in an S(N)2 reaction step. When the substituent on phosphorus is a phenyl group (R = Ph), the uncatalyzed reaction has an activation barrier of 17.9 kcal/mol, which is reduced by 10.9 kcal/mol on including the CuCl catalyst. The CuCl-catalyzed decomposition of 7-phosphanorbornadiene followed by olefin trapping of the terminal phosphinidene complex has a close parallel with the Cu(I)-catalyzed cyclopropanation reaction of diazoalkane. In both catalyzed reactions, copper(I) is coordinated to the phosphinidene/carbene as a Lewis acid, while a Lewis base is displaced from the phosphorus/carbon center as the olefin is added.