The reaction mechanism of the AuCl-catalyzed reaction of the α-thioallenes to give 2,5-dihydrothiophenes has been computationally studied using DFT (B3LYP/6-31G*, SDD for Au). Calculations indicate the complexation of α-thioallene with AuCl occurs preferentially at the distal double bond, followed by the C-S bond formation, the proton transfer from the sulfur to the carbon "b", and the [1,2]-hydride shift to give the 2,5-dihydrothiophene gold complex. The proton transfer is the rate-limiting step with very high activation energy in the gas phase. In the presence of one water molecule, the activation free energy of the proton transfer was lowered by as much as 19.9 kcal/mol. Furthermore, one dichloromethane molecule stabilized all of the transition structures by its hydrogen bonds.