The mechanism and selectivity patterns of the DABCO-catalyzed Cloke-Wilson rearrangement were computationally studied in detail using density functional theory calculations. Our computations suggest that the process occurs stepwise involving the initial ring opening of the cyclopropane promoted by a DABCO molecule followed by a ring-closure reaction of the readily formed zwitterionic intermediate. The regioselectivity of the initial nucleophilic ring-opening step strongly depends on the nature of the substituent attached to the cyclopropane moiety. The physical factors governing the preference for the more sterically hindered C2 (tertiary) position have been quantitatively analyzed by applying the combined activation strain model-energy decomposition analysis method. In addition, our calculations revealed a new mechanism for the analogous transformation involving vinylcyclopropanes consisting of an initial SN2' ring-opening process followed by a 5-exo-trig cyclization step, which proceeds without facial selectivity.