The mechanism of formation of an eta4-cyclobutadiene complex from a metallacycle, generated by oxidative coupling of two acetylenes with the fragments CpRuCl, [CpRu(PH3)]+, CpCo, and CpRh, was investigated by means of DFT/B3LYP calculations. Two distinct pathways can be envisaged. 1) A multistep reaction, which can be denoted the Vollhardt mechanism, proceeding via a cyclopropenyl carbene and a tetrahedrane-type intermediate. 2) A one-step transformation involving the formation of a third M-C bond with rearrangement of the metallacyclic ring. Although path 2 is definitely favored over path 1, both pathways are energetically prohibitive unless substituents are present on the acetylene. For the CpRuCl system with HC triple bond CR the barrier varies with R in the series H approximately Ph>Me>>SiMe3. On going from H to SiMe3, the barrier for path 2 drops from 41.1 to 26.8 kcal mol(-1). This latter value is already reachable, in agreement with experiment. Whereas the reaction mechanisms involving the fragments CpCo, CpRh, and CpRuCl are very similar (but not identical owing to the additional ligand in CpRuCl), those of [CpRu(PH3)]+ reveal a modification with serious consequences. In both paths 1 and 2, the originally planar metallacycle experiences first a bending distortion induced by the sigma-donor strength of P (in contrast to Cl), which compensates the loss of electrons from the ring brought about by bending. The bent metallacycle is already electronically asymmetric and thus the further course of the reaction is facilitated.